Cyprus economy (sector: oil and gas)

Natural gas and energy in general, is a sector that might have a huge impact on the economy of
a country. This is what is also expected for Cyprus as the discoveries of natural gas allow the
country to dream that this sector will be a game changer for the country’s economy. Currently,
services, tourism, and maritime transportation are the three pillars of the Cypriot economy.
These three sectors contribute more than 80% on the GDP and employ also about 80% of the
active population. When Cyprus will be in the position to start exporting natural gas to other
countries, these GDP allocations are expected to be shifted as the profit expected from natural
gas exploitations is estimated to be remarkably high and many new job positions are expected to
open.
There are many obstacles in Cyprus’s way though to make this dream come true. For this reason,
the dissertation will not be analyzing only the energy sector in the economy, but it will also
emphasize on the geopolitical impact this sector will have as these two elements are corelated,
and they also affect the decisions the country needs to make in order to make the most beneficial
choices. According to specialists, Cyprus will start earning profit from this sector in 8‐10 years
from today, therefore this research will be mostly a conjecture about how oil and gas will affect
the economy of Cyprus in the near future.
On July 9th, 2020, a foundation laying ceremony of LNG installations in Vasilikos took place. The
total cost of this project is estimated to be around €289 million. One of the key questions that
will be attempted to be answered under this study, is if the decision of the government of Cyprus
to proceed with the construction of an LNG terminal is the right approach or if it should have
proceeded with other alternative options.