Cyprus Seeks $1.3 Billion Loan From Russian Banks, Alithia Says

The Cypriot government is in talks to obtain a 1 billion-euro ($1.3 billion) loan from Russian banks that plan to back oil and gas exploration off the eastern Mediterranean island’s coast, Alithia reported.

Cyprus had sought a 5 billion-euro loan from the Russian government. That request has been reduced to 1 billion euros and redirected to banks that will finance development of Block 9 in Cyprus’s offshore exclusive economic zone, the Nicosia-based newspaper reported today, citing an unidentified government official.

The government decided last month to start talks with a group consisting of France’s Total SA, Russia’s OAO Novatek and GPB Global Resources for Block 9. Neoklis Sylikiotis, the Cypriot minister of commerce, industry and tourism, said on Aug. 22 that the country could receive as much as 300 million euros in signature bonuses from bids to explore for natural gas.

GPB is a unit of OAO Gazprombank, Russia’s third-biggest lender by assets, and operates in Africa, South America and the Middle East, according to the bank’s website.

The government’s decision in principle to grant a license to Total, Novatek and GPB is related to President Demetris Christofias’s negotiations with the so-called troika that oversees euro-area bailouts, the newspaper said without elaborating or saying where it got the information.

Cyprus in June became the fifth euro-area nation to request an international bailout.

The Finance Ministry declined to comment on the Alithia report when contacted by Bloomberg News. A government spokesman couldn’t immediately be reached for comment. A Gazprombank official couldn’t immediately be reached for comment.

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