The Director of the Cyprus Energy Department, Solon Kassinis, has rejected suggestions by some senior Cypriot politicians, including presidential candidate George Lillikas, that Cyprus should utilize the gas deposits of the Aphrodite field as collateral, in order to reduce the amount of the loans it is currently negotiating for its bailout program with the IMF, the European Commission and the European Central Bank.

Mr Kassinis told a press conference on 7 December that Cyprus would have to wait for the completion of the second confirmatory well Noble will drill on the Aphrodite field by late spring 2013 before it has an accurate picture of the actual size of the deposits. It would then take another year for an independent evaluation of the options for monetizing these resources before the confirmed reserves could be used as collateral. Moreover even if the Cypriot state hydrocarbon company KRETYK were to issue a bond utilizing its potential participation in the Aphrodite field as collateral, the credit rating it would receive would likely be the same as that of Cypriot state bonds, as is the case with almost all state-controlled oil companies. Cypriot bonds have seen their ratings slip over the last few years and are now designated as “junk” by international credit agencies. (CONTINUED - 682 WORDS)