Biden Visits Cyprus as Gas Fuels Reunification Talks

Photographer: Munshi Ahmed/Bloomberg

U.S. Vice President Joe Biden. Close

U.S. Vice President Joe Biden.

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Photographer: Munshi Ahmed/Bloomberg

U.S. Vice President Joe Biden.

Vice President Joe Biden will today become the most senior U.S. official in more than half a century to visit Cyprus as the search for alternative gas-supply routes into Europe draws international attention to the divided island.

After arriving in Nicosia late today, Biden will tomorrow meet Cypriot President Nicos Anastasiades to discuss issues including energy and regional security, a senior U.S. administration spokesman told reporters in a conference call before the trip. He will also meet Dervish Eroglu, leader of the breakaway Turkish Cypriot state, the official said.

The Ukraine crisis has left European nations seeking to reduce their reliance on Russian energy. In Cyprus, where natural gas deposits have been found offshore, leaders are trying to leverage the attention to generate momentum in negotiations to reunite the island 40 years after Turkey’s invasion. For the U.S. government, the trip is a chance to assess potential supply lines for European gas consumers as global leaders seek to reduce their reliance on Russian energy, the U.S. official said.

“The crisis in Ukraine and the gas reserves create an opportunity to capitalize on the broader interest in the region and push toward a solution of the territorial dispute,” said Takis Hajidemetriou, a former Cypriot lawmaker taking part in the reunification talks.

Biden’s three-day trip to Cyprus -- the only European Union member-state with United Nations peacekeers guarding a buffer zone on its soil -- is the first by a vice-president since Lyndon Johnson in 1962. He arrives from Romania where he met President Traian Basescu and Prime Minister Victor Ponta.

Stalemate

After decades of stalemate, a new round of talks on reunification has entered a “substantive phase,” according to the United Nations. Negotiators have outlined a new federal state with a decision-making structure similar to Belgium’s, where the Dutch and French speaking regions have wide-ranging powers, and federal authority focuses on the budget, defense and foreign policy.

Negotiators have also agreed on policing, courts and the structure of the legislature, Kudret Ozersay, the Turkish Cypriot community’s lead negotiator, said in a May 15 interview. He said that from a technical point of view, the dispute could be solved within months.

Ozersay’s opposite number Andreas Mavrogiannis said the negotiators still have to settle differences over the property of those displaced by the split and the role of Greek and Turkish armed forces on the island as well as how to implement EU rights to freedom of movement.

‘Serious Effort’

“A serious effort is under way,” he said in a May 14 interview. “But we have no concrete results in any of the core outstanding issues.”

Raising the stakes, Noble Energy (NBL) last year announced it had found as much as 6 trillion cubic feet of natural gas trapped beneath the sea bed around the Cypriot coast. Eni SpA (ENI), Korea Gas Corp. (036460), and Total SA (FP) are due to begin exploring for additional deposits this summer and the government expects to have results next year, Energy Minister George Lakkotrypis said in an interview with Bloomberg last week.

“Energy supply considerations have put the Cyprus reunification talks back on the international agenda,” said Niyazi Kizilyurek, a professor at the University of Cyprus.

Cyprus’s government has been pushing the EU to invest in the eastern-Mediterranean island as a hub for shipping gas to Europe from nearby countries including Israel, Egypt and Lebanon, as well as from its own deposits.

Investment Boom

The gas reserves open “a window of opportunity” for solving the dispute, Mavrogiannis said. “Cyprus is ideally located in the center of the energy supply routes in the region, and can become a contributor to regional cooperation and stability.”

Mavrogiannis forecast that a successful resolution of the territorial dispute would spur a boom in investment and construction accelerating the island’s recovery from the financial crisis which forced it to request a 10 billion euro ($13.7 billion) bailout from the International Monetary Fund and the euro area.

Ozersay said his concern is that the urgency of the Ukraine crisis persuades the international community to accept the “stability of the status quo” rather than pushing for a full settlement. Still, he met with the U.S. Ambassador John Koenig eight times in a week ahead of Biden’s visit.

“No one can deny the increasing role and the increasing interest of the United States in this issue,” he said.

To contact the reporters on this story: Nikos Chrysoloras in Athens at nchrysoloras@bloomberg.net; Georgios Georgiou in Nicosia at ggeorgiou5@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Ben Sills, Ben Holland

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