Monday, 5 December 2011

An article in The Economist about the Cypriot Oil and Gas exploration

I am very pessimistic about the hoopla over the oil and gas purported to lie just outside our reach in the Economic Exclusion zone of Cyprus. We still:
1) Do not know how much is down there
2) Do not have a way to take it out
3) Do not have a way to make it exportable (LPG or pipeline)
4) I have yet to see research that such a venture will actually promote economic growth (although the Euro does help against the Dutch disease --> where a increase in the exchange rate destroys all other industries but the oil and gas fields.

As a practical man I would like to see the steps taken to perhaps capitalize on the future boon of Cyprus such as developing the infrastructure, setting up the institutional basis, removing the topic out of the real of politics ect. Yet it seems that we are taking a different direction (secrecy, squabbling and promise of unearned riches ). Meanwhile the subject is getting an ever increasing interest from abroad as this article in the Economist shows.

I just wish some tells it straight: there is no such think as a free lunch, investments should go to developing a local exploration industry capable to compete globally, and we should copy the Norwegian example of taking gas decisions out of the real of politicians.
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