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Gaffe jeopardises Total drilling

A scandalous mistake that has left Total’s drilling operations up in the air – for which nobody is taking responsibility at the moment- has been revealed in the deal to privatise the Limassol port.

Monopoly terms favouring the DP World and GAP Vassilopoulos consortium have been discovered in the signed contracts which are contrary to the stated governmental policy of the Ministry of Transportation and the Port Authority to allow open competition for the provision of support services in the hydrocarbon industry.

These terms have created serious problems for the support activities of the offshore hydrocarbons industries looking to operate through the Limassol port.

The terms were only discovered and confirmed last week, when in an official ceremony attended by two ministers – Marios Demetriades and Giorgos Lakkotrypis – French energy company Total signed contracts with EDT Offshore for provision of support services  to the energy giant’s hydrocarbon operations through the Limassol port.

The day after the signing ceremony, the heads of the DP World and GAP Vassilopoulos consortium stated their objections to the Ministry of Transportation, regarding EDT Offshore providing their support services.

DP World and GAP Vassilopoulos representatives visited the Presidential Palace where they voiced their objections in no uncertain terms.

A Dubai solution

The Minister of Transportation tried to downplay the matter on public radio, saying that “it was blown out of proportion”. Sources say, however, that he appears to be furious with these developments, since he himself had previously assured the House of Representatives and business associations that the hydrocarbon support services would not be included among the monopoly terms given to the companies taking over the operations at the Limassol port.

His stated rationale for this decision was that it would foster competition and allow other interested companies to offer these services at the Limassol port. It is with this rational that the southern quay of the port was extended by 250 metres at a cost of €25 million with state funds: so that the existing infrastructure to serve interest parties in the hydrocarbons industry be extended.

The question that arises is why nobody was aware (if indeed that is the case) of the significant monopoly term on hydrocarbon support services in the contract signed by the government with companies operating the Limassol port. For now, Minister of Transportation Marios Demetriades and general manager of the Ministry and former president of the Port Authority, Alekos Michaelides, state that they did not know of the monopoly term in the contract.

An answer to the problem is currently being sought at a foreign legal counsel house hired by the Cyprus government to handle the matter.

The Minister is expected to try and reach a solution or temporary arrangement with the DP World Limited leadership in Dubai, with which he has requested a meeting. Demetriades will be there until Wednesday.

At the same time, Michaelides has intervened and is trying to mediate meetings between the consortium operating the Limassol port and EDT, to seek a practical solution to the matter.

Disbelief is the predominant mood at Total, with the energy giant informing all sides that no drilling is to take place until the issue is resolved.

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