Taking into account the growing hydrocarbon demand worldwide and the decreasing indigenous production in Europe, it will require huge efforts and substantial investments of the suppliers to mobilize these fuels in time. Besides, when assessing supply options, it has to be kept in mind that competition for supply will become far stiffer especially from North America, China and the emerging economies of South-East Asia. The vulnerability of the EU to energy supply risks is a fact but this could be no more! If the most conservative data is taken into account in regard to the hydrocarbon reserves existing in the EEZs of Israel, Cyprus and Greece and the rest that lie within the Southeastern Mediterranean, for the first time ever in European Energy History, the EU could be guaranteed an uninterrupted supply of a traditional energy source. The challenge ahead for the EU is to manage these new variables in the equation of the Southeastern Mediterranean region with ultimate responsibility and Europeanism so as to guarantee and improve the prospects, economic and social, of its citizens. Moreover, these hydrocarbon discoveries are bound to serve as a catalyst toward greater cooperation amongst the participating countries. The joint exploitation between these countries and the launching of joint projects has the potential to change the whole political and economic scene of the entire region to the better.

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The importance of the Southeastern
Mediterranean hydrocarbons to the EU
September 2013
Pytheas
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By Harris A. Samaras

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About the Conference
The "East Mediterranean Oil & Gas Conference" was held between 10 and 11 September 2013 in Paphos,
Cyprus at the Intercontinental Aphrodite Hills Resort Hotel. The Conference was organized by the ITE Group,
under the auspices of the Minister of Finance of the Republic of Cyprus, Mr. Harris Georgiades, who opened the
Conference.
Harris A. Samaras, Chairman & Group CEO of Pytheas was a speaker at the Conference. Herewith is his speech
with the title “The Importance of the Southeastern Mediterranean Hydrocarbons to the EU”.
About the Author – Harris A. Samaras
An Economist and presently the Chairman & Group CEO of Pytheas, an international investment banking
organization, Harris has also worked with the Bank of America Group, Thomson Financial BankWatch, and
Moody’s Investors Service. His expertise lies primarily in the areas of investment and corporate banking,
private equity and finance, risk management, corporate restructuring and business development. His research
and extensive publications in these areas range across practice rather than theory, economic and business
thought, entrepreneurship and geopolitics.
He has been an adviser to various governments, central banks, financial institutions, and other corporates and
has been a member of the board of directors of multinational organizations.

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I will not bore the distinguished audience with figures and data or with statements that have
been repeated over the past few years numerous times.
I am sure that we all here agree that by 2015 a substantial fuel gap emerges between
demand and supply coming from European production or imported from outside Europe. For
the depending on imports European energy industry, the sufficient hydrocarbon reserves
available in the medium to long run are in countries which are NOT so accessible in terms of
transmission distances or exist in fields that are increasingly difficult to develop (with the
consequence of rising production and transport costs).
Taking into account the growing hydrocarbon demand worldwide and the decreasing
indigenous production in Europe, it will require huge efforts and substantial investments of
the suppliers to mobilize these fuels in time. Besides, when assessing supply options, it has to
be kept in mind that competition for supply will become far stiffer especially from North
America, China and the emerging economies of South-East Asia.
Moreover, the Israelis, the Cypriots, the Greeks, the Lebanese, the Syrian, may find out very
soon that the billions of dollars of hydrocarbon reserves that lie within their territories may no
longer be worth exploiting if they do not take immediate action. As technologies evolve in the
rapid pace that they do, and as environmental impact always plays a secondary role to our
energy-starving globe, fuel such is shale gas and other may in the next few decades
supersede all.
The annual NG consumption of the EU amounts to about 500 bcm. Almost half of it is
imported from Russia, 160 bcm from Algeria and 90 bcm from Libya. By 2020 the demand for
natural gas in Europe will increase by another 225 bcm. The total energy deficit (Oil & Gas) of
the EU will therefore reach 845 bcm. These EU requirements for NG can neither be satisfied
by Russia – which has 44 tcm of NG resources and an annual production of 600 bcm – as 2/3
of its reserves and production are allocated for domestic uses, nor by Algeria and Libya as
their reserves amount to only 6.2 tcm.
The vulnerability of the EU to energy supply risks is a fact but this could be no more! If the
most conservative data is taken into account in regard to the hydrocarbon reserves existing in
the EEZs of Israel, Cyprus and Greece and the rest that lie within the Southeastern
Mediterranean, for the first time ever in European Energy History, the EU could be guaranteed
an uninterrupted supply of a traditional energy source.
What makes these findings a remarkable opportunity for the EU is that Greece and Cyprus are
EU-member states, and Israel an honest and trustworthy ally.
A third energy corridor for the EU of the EU! The EU will no longer be a hostage, to fluctuating
market prices of sources that are exogenous, and to other countries, that may also be volatile
or even against its own interests. Additionally, the related derived opportunities created in
terms of EU potential competitiveness gains, EU growth and jobs and investment momentum
are immense.
The challenge ahead for the EU is to manage these new variables in the equation of the
Southeastern Mediterranean region with ultimate responsibility and Europeanism so as to
guarantee and improve the prospects, economic and social, of its citizens. Moreover, these
hydrocarbon discoveries are bound to serve as a catalyst toward greater cooperation amongst
the participating countries. The joint exploitation between these countries and the launching
of joint projects has the potential to change the whole political and economic scene of the
entire region to the better.
The different phases of the Project, further surveying and exploration, exploitation through
CNG, LNG and the East Med pipeline, require joint and parallel coordination and action
between Israel, Cyprus, Greece and the EU. The challenges are ample, engineering and
construction related, management and time related, economic and geopolitical, security
related.

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But of all these challenges, the biggest hurdles are the geopolitical and security ones!
Only very recently:
We watched in awe the European Union, the International Monetary Fund and the
international media blaming Cyprus’ banking practices as the main cause of the crisis… and
made sure, that the economy of Cyprus was ruined in just a weekend!!!
We watched in awe manic, European Union politicians, arguing that Cyprus is harboring
criminal money, that Cyprus is an offshore tax haven and a money-laundering center!
We watched in awe the Eurogroup President spreading terror to Cyprus and the markets
worldwide when he stated that the Cyprus “deal” is the new template...
We watched in awe a totalitarian EU “stealing” the deposits of its Cypriot-EU citizens…
We watched in awe a Cypriot government (the previous Cypriot government) unable to react
to at least 4-year market warnings, confused and contradicting itself in the name of political
cost and personal interests… triggering the Cyprus financial meltdown…
We watched in awe the Cypriot opposition, most parties included (including the political
parties composing the current Cypriot government), maintaining a selective criticism
approach, again in the name of political cost and personal interests… triggering the Cyprus
financial meltdown…
We watched in awe the powerful Cypriot trade unions taking an uneducated and anachronistic
stance on the whole matter; despite the educated fact that they triggered, contributed and
still contribute negatively to the crisis…
We watched in awe the magical appearance of numerous experts, arguing with absolute and
unqualified certainty about all aspects of the economy and the Cyprus financial crisis… none of
whom – at least those that I watched, heard and read about (and I did plenty) – predicting or
cautioning on time, and time was more than a decade ago, that the Cyprus economy would
have to change or sink!
All of the above, political parties and governments, trade unions and the so-called experts
continue up until today to blame each other… first they blame the opposition, then they blame
the foreigners… never themselves… like in a permanently-worn-campaign-shell…
Worse of all these are more than less the same people that are currently managing the fate of
the Cyprus hydrocarbons! Not the qualified experts, not the technocrats, not the scientists but
these same politicians and their “click”, the same political leadership that caused the Cyprus
financial holocaust!
Note that as per the above whatever applies to Cyprus also very well applies to Greece…
Spoke a bit longer than I probably should about Cyprus’ and EU’s inefficiencies and inabilities
but only because both investors and governments within this room, and the EU, should all
work towards eliminating these obstacles of inefficiency, obstacles that if not removed, would
only bring one result: Failure! Failure to all!
The Southeastern Mediterranean Hydrocarbons, we all know, all of us here know, could validly
become the most important energy corridor in EU’s history. The hydrocarbon reserves that lie
within Israel, Cyprus and Greece could satisfy Europe’s energy needs for decades to come…
(And I do not exclude Lebanon, Syria, Egypt and Libya; it is just that their geopolitical
situation is unfortunately a bit more complex).
As I had previously highlighted, of all the challenges, the geopolitical and security ones
encumber the biggest hurdle. Evidently, a new order is emerging as a result of three major

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events: (a) The redrawing of the region’s hydrocarbon map, with the discovery of substantial
hydrocarbon deposits in the Israeli and Cypriot exclusive economic zones; (b) Turkey’s
adoption of a hostile neo-Ottoman ideology to guide it in the 21st century; and (c) the “Arab
Spring”. At the mid-point of this political shift, Israel, Cyprus and Greece have remained the
principal states in the region that are friendly to the “Free World”.
We all know that the decades-long alliance between Turkey and Israel remains in shambles,
and U.S. diplomats are working overtime to fix what's broken... Mr. Erdogan has led Turkey
since 2002 as head of the Justice and Development Party, which is rooted in Islam. Backed by
a roaring economy, Mr. Erdogan has set vaulting ambitions to expand Turkey's leadership of
the Arab world, and strengthen economic and political ties to the East and predominantly with
Iran, even while preserving the nation's valuable security relationship with the U.S. But these
goals often work against one another. Turkey's ties to the U.S. have been strained by its feud
with Israel, which has sent the Obama administration into an unsuccessful scramble to make
peace between two U.S. allies who used to be friends…
Turkey sees its economic future in the East, having left the issue of European Union
membership in its rearview mirror. Since the AKP won re-election handily about more than a
year ago, Mr. Erdogan feels he's in the driver's seat, with an enormous amount of political
capital at his disposal. As revealed in a Wiki Leaks document about a year ago, Mr. Erdogan's
foreign minister, Ahmet Davutoglu, talked about Turks as the "New Ottomans," the dominant
player in the region.
U.S. officials “understand” that Mr. Erdogan still remains bitter about Israel's May 2010
commando attack on a flotilla organized by activists in Turkey to bring aid to the Gaza Strip.
But it is harder for U.S. officials to accept the way Mr. Erdogan has escalated his conditions
for normalizing relations with Israel; now demanding an end to the blockade of Gaza.
U.S. officials are nervous about what they see as a populist campaign to build an international
reputation on the back of anti-Israel rhetoric. Already considered the most popular politician
in the Arab world, Mr. Erdogan thrilled crowds during his last trips to Egypt, Tunisia and Libya
when he stated that Israel was "the West's spoiled child."
Turkey had become outspoken in its opposition to Syrian President Bashar Assad's violent
crackdown on antigovernment demonstrators, at the beginning of the Syrian conflict, after
begging Mr. Obama on July before last to delay calling for Mr. Assad to step down. But though
Mr. Erdogan has denounced Mr. Assad's crackdown as "savage," he had tried to avoid
disrupting Turkey's valuable trade and investment ties to Syria, not as far as the White House
would had then preferred....
U.S. officials claim they stay in close touch with Turkey, in part to avoid surprises. About two
years ago, for example, Pentagon officials were alarmed to learn that Turkey had conducted
military exercises with China, with no advance notice, raising questions about its plans with
NATO…
The U.S. has reached out to Turkey during the Erdogan era and received very little in return,
starting with Ankara forbidding the U.S. Army's Third Infantry Division to enter Iraq overland
through Turkey. Had that force worked its way south toward Baghdad in 2003, history might
well have played out differently in terms of the strength of the Iraqi insurgency and its
capacity to generate years of unrest and kill thousands of U.S. troops.
With no one willing to call Mr. Erdogan to account, his Fundamental Islamist regime regularly
bashes the press, narrows the parameters of civil liberties at home, and defends terrorists
such as Hamas abroad.
For a change and with respect, when Turkey talks about flexing its muscles in the
Mediterranean, the U.S. should remind Ankara that the U.S. has interests in the region, and
that the Sixth Fleet is still in business. And Congress once and for all should remind Turkey
that there is no statute of limitations on genocides. With Ankara so keen on seeking

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apologies, it's time we heard Turkey offer apologies for the massacres of a million or more
Armenians, a million or more Greeks, hundreds of thousands of Assyrians during and after
World War I, as well as an offer of reparation payments for the families of the victims.
Turkey seems to think the U.S. no longer matters, that its own destiny as regional
superpower is assured, and that no one can challenge its moralistic stance as Turkey sits
grandly in judgment of all its neighbors. Whether the U.S. can succeed in influencing Turkish
behavior remains to be seen. But the days of going to the diplomatic table with a basket of
carrots and no sticks must end.
Turkey has redirected its strategic thinking away from the United States and the Free World.
The notion that Turkey will only go "so far" and will feel compelled, at the end of the day, to
return to the Free World's fold, reflects wishful thinking…
In December 2010, Turkey reacted furiously after Israel and Cyprus signed an agreement
demarcating the border of their endorsed by international law maritime exclusive economic
zones.
In mid September 2011, Cyprus, with a consortium consisting of Noble Energy Inc. of U.S.
interests and Delek Group Ltd. of Israeli interests commenced exploration drilling. In violation
of international law, Turkey has followed its verbal threats by sending a number of naval
vessels – frigates, corvettes, gun-boats – accompanying the “Koca Piri Reis”, a "research
vessel," into the Exclusive Economic Zone (EEZ) of Cyprus. At the same time, there has been
an increase in air activity of the Turkish air force south of Cyprus, and air and naval exercises
of the Turkish forces. Even as we speak, the Turkish “Barbaros Hayrettin Pasa”, another
research vessel is on its way to Cyprus territorial waters...
Despite firm responses to the Turkish threats and allegations, by the United States, European
Union member states, and the EU Commission, with clear statements by all aforementioned
bodies, that Cyprus is in full compliance with international law and norms and has every
justification to exercise its sovereign right, Turkey threatens that it will go ahead with
exploration and possible exploitation or extraction activities within the exclusive economic
zone of Cyprus… the exclusive economic zone of a member of the European Union... and
Turkey is a candidate for membership to the Union…
A combination of Islamist rule, a neo-Ottoman ideology and Turkey’s attempt to return as the
region’s hegemon opposes the U.S.’s and Free World’s goal of a democratic and peaceful
region. It threatens America’s allies — Greece, Cyprus, Israel, and EU member Bulgaria,
which has complained of Turkey’s control over both supplies and prices of the natural gas it
transits to the EU…
We have the pleasure and honor today to have with us his Excellency the US Ambassador to
Cyprus, Mr. John M Koenig and I cordially greet him.
Your Excellency, looking forward to your comments on the whole matter we know that
amongst other you will state that the hydrocarbons of Cyprus are for all Cypriots and for all
legal Cypriots they should be: Greeks, Turks, Armenians, Maronites and so forth! But would
the U.S. if it were in Cyprus’ position share its wealth with a nation that raped and murdered
Americans and illegally occupied 37% of American soil? A nation that systematically and
intentionally alters the morphological and anthropological characteristics of the Island, defying
UN and EU Commission resolutions? Would you be able to trust such nation?
It’s been extensively discussed in press and media lately that there could be an exchange of
the ghost city of Famagusta with a pipeline from Cyprus to Turkey… The city of Famagusta; a
shame and disgrace to all of us claiming to be part of the Free World…
Does anyone in this room truly believe that such a pipe route (via Turkey) would promote EU
stability and EU energy security? Isn’t it more than likely that Europe will become a hostage
to a country that is itself unstable and a bully to all its neighbors? How does Israel feel about

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it? Could they ever trust their natural gas to be running through a pipe that is controlled by
the government of a nation that officially calls them all these foul names?
And no I am neither a fanatic Mr. Ambassador nor an enemy of the United States of America.
On the contrary, I am a friend, and a citizen of the world, of the free world! I believe and
preach that nationalism is a disease that spreads polarization and ignorance.
How could any Cypriot, Israeli or Greek entrust the future of his children to somebody that is
a bully, one that defies and disrespects international law; that deprives its own citizens of
basic human rights and fundamental freedoms?
Most of us are here because we know that the hydrocarbon reserves in the Southeastern
Mediterranean are plenty; and they must be a multiple of what it has been at times published.
Now,
Questions and considerations about an Israel-Cyprus-Greece pipeline, the “East Med Pipeline”,
are secondary and premature at this stage.
Considerations of a pipeline via Turkey are simply catastrophic for Europe and anyhow a
wishful thinking that is impossible to materialize; those that deliberately push for such a
route, at current geopolitical conditions, they must be considered enemies of Europe.
Delays, incompetence and non-incorporation of a Greek Energy Plan, an appropriate legal
infrastructure that will encourage investors to speed up the process for the exploitation of the
hydrocarbons that lie within the EEZ of Greece, are the least inexcusable; and Greece must
be “urged” and assisted to deal with this issue of utmost importance that is missing from the
European energy puzzle, promptly and efficiently.
Delays of further reinforcement of a tangible and substantial Israel-Cyprus-Greece Energy
Security Trilateral “Pact” – with the addition and support of a proactive on the matter EU and
U.S., as and each and every other member of the Free World – will only create more tension
and instability in the Region and not only.
The hydrocarbons discovered in Cyprus are not just a Cyprus issue; the hydrocarbons that are
scientifically estimated to exist in Greece are not just a Greek issue; as are not the
hydrocarbons that are discovered and
lie within Israel just an Israeli issue. They are issues of primary importance for the whole of
the European Union, the U.S. and the Free World that should be tackled jointly by all, within
international law.
One of the norms that the latest (and still going) Global Financial Crisis has taught us, is that,
a stable EU means a stable U.S., and vice versa! Likewise, an East Med Energy Corridor, that
would avoid non-EU countries, would guarantee an uninterrupted energy supply source for
the EU, of the EU!
Thank you for your patience and time,

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Additional notes on EU Energy Security
As the EU is becoming increasingly dependent on imported hydrocarbons the vast majority
of its member states are largely or completely dependent on a single natural gas supplier.
Moreover, the EU is becoming increasingly exposed to the effects of price volatility and
price rises on international energy markets and their consequences of the progressive
concentration of hydrocarbon reserves in few hands.
It therefore remains important for the EU to promote diversity with regard to source,
supplier, transport route and transport method. Projects should be developed to bring
natural gas from new regions, to set up new gas hubs in South and Southeastern Europe,
to make better use and limit the currently expensive need of strategic storage possibilities
(the considerable planned new investments in new storage and pipeline capacity that
would be needed to ensure a higher degree of security will have to be balanced against the
costs this will imply for the consumers), and to facilitate the construction of new liquid
natural gas terminals.
To limit EU's external vulnerability to imported hydrocarbons, and promote growth and
jobs, thereby providing secure and affordable energy to consumers, Europe has to
transform itself into a highly energy efficient and low CO2 energy economy (thus limiting
the use of oil and increase the use of NG which is cleaner, leading to lower emissions of
greenhouse gases and local pollutants), igniting a new industrial revolution, accelerating
the change to low carbon growth and, over a reasonable period time, dramatically
increasing the amount of local, low emission energy that Europe produces and uses. The
challenge is to do it in a way that maximizes the potential competitiveness gains for
Europe, and limits the potential costs. The Southeastern Mediterranean hydrocarbons
provide a solution to all of the above! Without this Project, the EU’s objectives in other
areas, including the Lisbon Strategy for growth and jobs and the Millennium Development
Goals, will also be more difficult to achieve...
1. The EU should upgrade its role and involvement in the hydrocarbon efforts of Cyprus,
Greece and Israel, to assist and ensure that an appropriate framework and solid plan
are in place so that exploitation commences as quickly as possible.
2. The EU should use its regional and global leverage to ensure that geopolitical
challenges are resolved within international law and that the Southeastern
Mediterranean hydrocarbons become a tool for reconciliation and regional stability.
3. The East Med Energy Corridor should be included in the EU’s Energy Policy and dealt
as such.
For the first time ever the EU is given the opportunity to avoid dependence of energy
supply on politically and economically volatile countries and regions such are Ukraine,
Turkey, Eurasia and the Middle East! Europe is confronted with a unique challenge and a
remarkable opportunity and the need for EU action is stronger than ever!

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See also other related publications by Pytheas (Chronologically)
► Cyprus facts and European Union totalitarianism and horror (April 2013)
► Cyprus – Is the European Union opening Pandora’s Box? (March 2013)
► The failure of the Greek State engendered a disillusioned society (May 2012)
► Southeastern Mediterranean Hydrocarbons – A new energy corridor for the EU? (April 2012)
► Cretan Gas Fields – A new perspective for Greece’s hydrocarbon resources (March 2012)
► The Economic and Geopolitical importance of Eastern Mediterranean gas fields for Greece and the EU
(January 2012)
► Cyprus Hydrocarbons – A Presentation (January 2012)
► Cyprus – A country “ruled” by benighted labor union leaders? (December 2011)
► Cyprus – A country in denial and a scandalous political leadership (December 2011)
► Cyprus – Finally, energy security for the EU in the pipeline? (November 2011)
► Turkey unveiled and the dawn of a new energy opportunity for the EU (October 2011)
► The U.S. debt crisis, the U.S. and EU leaders and their power games (August 2011)
► Could the Greek Financial Crisis lead to the end of the EU as we know it? (June 2011)
► Cyprus – Why the C.O.L.A. must be abolished immediately! (March 2011)
► Cyprus must change or suffer! (February 2011)
► Investing in Cyprus, an EU bridge to the world of business (February 2011)
► Cyprus – The economy calls for immediate action! (December 2010)
► Cyprus – Real estate and construction industries optimistic despite the slowdown (October 2010)
► The long overdue emergency loan for Greece is announced. Is it enough? (April 2010)
► Greece must change or sink! (December 2009)
► Twenty years after the collapse of “communism”, the global financial crisis pushes emerging European
markets to the brink of collapse! (November 2009)
► Laissez-faire, the “Freer Market Global Economy”, the investment banks and the policymakers... (August
2009)
► Greece unlikely to escape its worst financial crisis of modern times! (July 2009)
► The US economy is in trouble! (February 2008)
Disclaimer
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