Ship­ping: the game-changer in pol­i­tics?


Financial Mirror (Cyprus) - - FRONT PAGE -

It’s been a hand­ful of years since Cypri­ots be­came ec­static with the po­ten­tial of oil and gas dis­cov­er­ies, with non-ex­pert politi­cians mak­ing prom­ises about how they would get crispy eu­ros into the pock­ets of voter-cit­i­zens, mak­ing this a lu­cra­tive means to get the peo­ple to re­ject any form of so­lu­tion to the Cyprob. Since then, the energy dream has al­most but van­ished, the ex­cite­ment has sub­sided and busi­ness logic has grad­u­ally (but slowly) started to over­come na­tion­al­is­tic sen­ti­ment.

Tur­key’s well an­tic­i­pated ar­ro­gance did not help ei­ther, try­ing to poke its nose in other peo­ple’s busi­ness, once again based on an ir­ra­tional sense of pop­ulism as op­posed to the long-term ideals of the public good. Hav­ing seen with its own eyes the sur­vey re­sults from the Bar­baros ex­plorer, it re­alised that the Cyprus off­shore gas­fields would be be­yond its reach and well out­side the bound­aries of the Turk­ish Cypriot “con­stituent state”, in the case of a fed­eral so­lu­tion.

This hard­line at­ti­tude from Ankara has also mis­guid­edly ex­tended into the mar­itime sec­tor, where apart from its low-labour cost ship­yards, the Turk­ish flag has a min­i­mal pres­ence in ship-own­ing and ship-man­age­ment, and nowhere near the ex­pe­ri­ence and knowhow that the Cyprus-based com­pa­nies have.

The fact that Cyprus is build­ing up, brick by brick, its energy up­stream (ex­plo­ration) sec­tor, with the mar­itime fleet pos­si­bly con­tribut­ing to a midstream (trans­port) in­dus­try, the only thing miss­ing from the puz­zle is the fi­nal piece of ‘down­stream’ dis­tri­bu­tion (pipe­lines, mar­ket­ing, re­finer­ies). With Egypt as yet un­de­cided about its fu­ture needs for nat­u­ral gas and the re­cent dis­cov­ery in the Zohr gas­field pos­si­bly over­turn­ing Cypriot prospects for ex­ports, it is only a mat­ter of time that our other ex­port­ing neigh­bour, Is­rael, rekin­dles its one-time love re­la­tion­ship with Ankara and re­vises plans to pipe gas over­land via Ankara to western Euro­pean con­sumers.

As Is­rael would prob­a­bly need to share the ini­tial sec­tion of its un­der­sea pipe­lines with Cyprus, this is where the Cypriot mar­itime sec­tor comes in, as a global slow­down in con­sumer con­sump­tion and, hence, a slow­down in de­liv­er­ies of raw ma­te­ri­als to the Far East and re-ex­port of goods, will make shipown­ers re-al­lo­cate their fleets, so that energy is shipped from the eastern Med to nearby re­finer­ies or pipe­lines, such as in Tur­key.

Although Cyprus ship­ping would greatly ben­e­fit from a so­lu­tion to the 41-year prob­lem and the open­ing up of Turk­ish ports, in fact, Ankara (what­ever regime is rul­ing) would ben­e­fit far more from a close part­ner­ship with Cyprus, be­yond the other lo­gis­ti­cal ben­e­fits such as aban­don­ing its fi­nan­cial sup­port to the statelet in the north and main­tain­ing a costly mil­i­tary pres­ence on the is­land.

Af­ter all, a so­lu­tion does not nec­es­sar­ily mean that Cypri­ots will go to bed with Tur­key. They just need to have a re­spectable busi­ness agree­ment, as is the case with Is­rael, where re­la­tion­ships have yet to fully warm to a mu­tu­ally ben­e­fi­cial level.

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