Interview of Dr. Theodore Tsakiris to Isotimia correspondent Ms. Giota Iliou, as published in the issue of 27-28 August 2011, (p. 1 and p. 21)

Q: A new era for Libya, what does it mean for Europe energy-wise? Who are rubbing their hands with joy?

A: The first ones rubbing their hands with joy are those that rushed to assist the Benghazi rebels to overthrow the regime. In the post-Qaddafi period, the European and probably global power that will have the first say most clearly is Paris. France led in all the phases of his diplomatic, military and economic isolation, pushing also the Italians and the British, who had much higher energy and financial interests in the country, in the same direction.

From the energy point of view for Europe, Libya remains one of the most important sources of imported oil. The E.U. states covered about 12% of their total oil imports from Libya, rendering the North African country the fourth most important oil exporter to Europe after Russia, Norway and Saudi Arabia. Yet, how soon Libyan oil will return in the international market depends on two factors:

(i) The type and speed of the country’s internal political re-stabilization, something bound to take many months to clarify whereas the eventuality of a Qaddafi guerilla war remains extremely possible especially if members of the Colonel’s family remain at large within Libya, and

(ii) The degree of damage in the oil and natural gas production fields, as well as the refining the export infrastructure during the conflict. From what we know, the damaged incurred is not especially extensive, but given the fact that the combat continues, nobody may exclude a “scorched earth” policy by those forces remaining loyal to Qaddafi.

In any case, the return of Libyan exports to the levels attained before January 2011 (ca. 1.6-1.7 million barrels/day) will be a procedure that will last for many months, if not 1 to 1½  years, especially in case, as it is almost certain, of a reshuffling of the oil “deck of cards”

Q: What is the view of Greece, but mainly of Europe, towards the natural gas deposit in the EEZ (Exclusive Economic Zone) of Cyprus?

A: This particular deposit is of great strategic importance first of all for Cyprus itself and secondarily for Greece but also in a wider sense for the E.U. By the end of the year or the beginning of the next, following the completion of the exploratory drilling set to begin on 21 September, we will have a very clear picture of the morphology and the exploitable reserves of this specific deposit. The initial seismographical research mentioned the existence of a potential reserve of about 280 billion cubic metres (bcm). To understand what this number means, Block 12 would be able to cover the needs of Greece for more than seven decades – were internal consumption of natural gas to remain at today’s level of approximately 3,65 bcm.

Yet, the dynamic of the reserve is more important as it is possible that geographically it extends also under the neighboring Israeli EEZ. If this is proved, we will be able to talk about a potential reserve of about 730 bcm, by including the Leviathan deposit, which lies about 40 km off the Cypriot field. For comparison, the proved natural gas reserves of Libya amount to 1.54 trillion cubic meters (tcm), while the reserves of the Shah Deniz field, on which depends the materialization of the ITGI, Trans Adriatic & Nabucco pipelines, are estimated at 1.2 tcm.

These particular deposits may by 2019-2020 provide the European market exports of about 20 bcm/year, at a time that Libyan and Egyptian natural gas exports to Europe in 2010 hovered at about 15.5 bcm, whereas the maximum amount of Azeri exports to reach Europe through Turkey is very possible to not surpass 10 bcm until 2020. Beyond that, the Cypriot-Israeli exports do not contain, if conducted by gas tanker ships, any substantial transport risk, something which is not valid in the case of pipelines with lengths of many thousand km, crossing geopolitically volatile areas such as Transcaucasia and the Kurdish regions of Turkey.

Q: How do you outline the interest for Israel?

A: Israel obtains through Cyprus a European strategic and energy linchpin, through which it may extend its political-economic influence in the E.U. and emerge as a major hydrocarbon exporter based on the utilization of the Leviathan field and its unification with Block 12 into a single export system. The construction of such a system (pipelines and liquefaction unit) is expected to cost around $10 billion and will be the largest investment in the modern history of Cyprus.

Q: What does Block 12 mean for Greece?

A: If Greek demand reaches about 7-8 bcm by 2020, Block 12 can comfortably cover 50% of this Greek consumption. Beyond reducing your energy dependence, you obtain as a country an additional advantage. You have much less need to subtract gas from the pipelines crossing through Greece to reach Europe as well as a stronger bargaining position against Turkey, Russia and Azerbaijan and any other joint venture would like to pass pipelines through Greek territory, strengthening in parallel the potential of further exploration of both Greek and Cypriot seas, which we should not forget that are also European seas.

Q: Greek deposits. Do they exist? What do they secure? Who claim them?

A: At this moment I want to believe we lie 12-18 months before the start of the first drillings in the Ionian and the Libyan sea. The Greek Regulatory Corporation for Hydrocarbons is expected to be staffed by the end of December. At the same time, the Hellenic Ministry of Environment, Energy and Climate Change has forwarded the to public consultation the relevant maps of the areas where the first seismic surveys since 1997 are to be carried out, while the tender for the selection of seismographic companies is expected to proceed within the following months. There is interest by French, Norwegian and American companies. Based on the seismographic results the following steps should be accelerated so as to -within a visible horizon spanning 3-4 years- be able to increase the local production, reduce our deficient balance and reap the first advantageous impacts from the increase of foreign investment.