Dr. GERD DÜCKELMANN-DUBLANY - WKO.at€¦ · The market potential of Cyprus TAP • Length: 1,900 km • Depth: 3000 meters • will begin in the natural gas fields off the coast

THE MARKET POTENTIAL OF CYPRUS

BUSINESS OPPORTUNITIES FOR AUSTRIAN COMPANIES

Dr. GERD DÜCKELMANN-DUBLANY

FORUM BUSINESS OPPORTUNITIES IN CYPRUS

Vienna, 05.06.2019

ECONOMIC OVERVIEW

• Impressive turnaround since 2015

• GDP growth 2018: +3,9 %

• Recovery on a broad basis: Construction, tourism, private consumption

• Approx. 4 million tourists in 2018 (+7,8 %) – all-time record!

• April 2019: +4,8 % - highest volume ever recorded

• Contribution of Tourism to GDP at 13 %

• 3 Imbalances: Public Debt, Private Debt, NPLs

• Austrian exports of goods 2018 +9 %

The market potential of Cyprus

2

ECONOMIC PERFORMANCE


GDP at current prices and exchange rates1 Real GDP Growth1

(in mil. EUR) (in mil. EUR)

3

19.490

18.14017.610 17.746

18.490

19.64920.731

21.618

0

5.000

10.000

15.000

20.000

25.000

2012 2013 2014 2015 2016 2017 2018 2019*

-1,3

2,0

4,84,5

3,9

3,1

2,7

-2

-1

0

1

2

3

4

5

6

2014 2015 2016 2017 2018 2019* 2020*

* Forecasts

Source: EU-Commission, OECD 1 according to ESA 2010

Update: May 2019

DEVELOPMENT OF FOREIGN TRADE


Imports of goods Exports of goods

Unit: in bn. EUR Unit: in bn. EUR

4Source: Cystat, 2018

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

2016 2017 2018

7,1

8,2

9,1

4,7 4,9 5,2

Total Imports Imports from EU

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

2016 2017 2018

2,7 3,0

4,2

1,3 1,1 1,2

Total Exports Exports to EU

TOP HS/CN POSITIONS


5Unit: in mil. EUR

Source: Eurostat, 2018

142,9

166,4

175,6

188,2

237,3

395,5

443,7

624,5

1.902,3

1.934,2

0 200 400 600 800 1.000 1.200 1.400 1.600 1.800 2.000

72 IRON AND STEEL

22 BEVERAGES, SPIRITS AND VINEGAR

73 ARTICLES OF IRON OR STEEL

39 PLASTICS AND ARTICLES THEREOF

30 PHARMACEUTICAL PRODUCTS

85 ELECTRICAL MACHINERY AND EQUIPMENT AND PARTS THEREOF; SOUND RECORDERS AND REPRODUCERS,…

84 NUCLEAR REACTORS, BOILERS, MACHINERY AND MECHANICAL APPLIANCES; PARTS THEREOF

87 VEHICLES OTHER THAN RAILWAY OR TRAMWAY ROLLING-STOCK, AND PARTS AND ACCESSORIES THEREOF

27 MINERAL FUELS, MINERAL OILS AND PRODUCTS OF THEIR DISTILLATION; BITUMINOUS SUBSTANCES;…

89 SHIPS, BOATS AND FLOATING STRUCTURES

48,1

55,9

117,2

142,3

146,9

204,1

248,0

300,1

1.013,5

1.459,6

0 200 400 600 800 1.000 1.200 1.400 1.600 1.800 2.000

29 ORGANIC CHEMICALS

99 OTHER PRODUCTS

84 NUCLEAR REACTORS, BOILERS, MACHINERY AND MECHANICAL APPLIANCES; PARTS THEREOF

88 AIRCRAFT, SPACECRAFT, AND PARTS THEREOF

73 ARTICLES OF IRON OR STEEL

04 DAIRY PRODUCE; BIRDS' EGGS; NATURAL HONEY; EDIBLE PRODUCTS OF ANIMAL ORIGIN, NOT…

85 ELECTRICAL MACHINERY AND EQUIPMENT AND PARTS THEREOF; SOUND RECORDERS AND…

30 PHARMACEUTICAL PRODUCTS

27 MINERAL FUELS, MINERAL OILS AND PRODUCTS OF THEIR DISTILLATION; BITUMINOUS SUBSTANCES;…

89 SHIPS, BOATS AND FLOATING STRUCTURES

Imports of goods

Exports of goods

BILATERAL TRADE OF GOODS WITH AUSTRIA


6

Source: Foreign Trade Statistic, Statistik Austria; *preliminary values

Unit: in mil. EUR

11,4 8,2 5,4 7,2 5,2 4,3 8,1 5,1 4,79,4

13,68,5 11,5

29,2

11,0

21,6 22,916,2 15,0 17,6 17,4 20,1 19,7 18,515,0 15,2 18,2

28,5 28,838,0 36,9

105,0

48,139,9

45,750,9

62,6

76,1

65,8 66,874,8

91,8

111,5

73,5

48,253,2

67,673,7

- 30,0

20,0

70,0

120,0

170,0

220,0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*

Exports of Goods to Austria Exports of Goods to Austria excl. HS/CN 89 - Ships, Boats and floating Structures

Imports of Goods from Austria Imports of Goods from Austria excl. HS/CN 89 - Ships, Boats and floating Structures

TOP IMPORT POSITIONS FROM AUSTRIA


7

17,785 ELECTRICAL MACHINERY

AND EQUIPMENT AND PARTS

THEREOF…

15,184 NUCLEAR REACTORS,

BOILERS, MACHINERY AND

MECHANICAL APPLIANCES;

PARTS THEREOF

4,487 VEHICLES

OTHER THAN

RAILWAY OR

TRAMWAY

ROLLING-STOCK,

AND PARTS AND

ACCESSORIES

THEREOF

4,061 ARTICLES OF

APPAREL AND

CLOTHING

ACCESSORIES,

KNITTED OR

CROCHETED

3,439 PLASTICS AND

ARTICLES

THEREOF

3,122 BEVERAGES,

SPIRITS AND

VINEGAR

2,895 TOYS, GAMES AND

SPORTS REQUISITES;

PARTS AND

ACCESSORIES

THEREOF

2,690 OPTICAL,

PHOTOGRAPHIC,

CINEMATOGRAPHIC,

MEASURING,

CHECKING,

PRECISION, MEDICAL

OR SURGICAL

INSTRUMENTS AND

APPARATUS; PARTS

AND ACCESSORIES

THEREOF

2,548 PAPER AND

PAPERBOARD;

ARTICLES OF

PAPER PULP, OF

PAPER OR OF

PAPERBOARD

2,104 DAIRY PRODUCE;

BIRDS' EGGS;

NATURAL HONEY;

EDIBLE PRODUCTS

OF ANIMAL ORIGIN,

NOT ELSEWHERE

SPECIFIED OR

INCLUDED

Source: Foreign Trade Statistic, Statistik Austria, 2018

Unit: in mil. EUR

TOP EXPORT POSITIONS TO AUSTRIA


8

7,404 DAIRY PRODUCE;

BIRDS' EGGS;

NATURAL HONEY;

EDIBLE PRODUCTS

OF ANIMAL ORIGIN,

NOT ELSEWHERE

SPECIFIED OR

INCLUDED

2,822 BEVERAGES,

SPIRITS AND

VINEGAR 1,630

PHARMACEUTICAL

PRODUCTS

1,108 EDIBLE FRUIT

AND NUTS; PEEL

OF CITRUS FRUITS

OR MELONS

0,894 FURNITURE;

BEDDING,

MATTRESSES…

0,715 ANIMAL OR

VEGETABLE FATS

AND OILS…

0,685 ELECTRICAL

MACHINERY AND

EQUIPMENT AND

PARTS THEREOF…

0,332 TANNING OR

DYEING

EXTRACTS…

PAINTS AND

VARNISHES…INKS

0,207 EDIBLE

VEGETABLES AND

CERTAIN ROOTS

AND TUBERS

1,987 VEHICLES

OTHER THAN

RAILWAY OR

TRAMWAY

ROLLING-STOCK,

AND PARTS AND

ACCESSORIES

THEREOF

Source: Foreign Trade Statistic, Statistik Austria, 2018

Unit: in mil. EUR

BILATERAL TRADE OF SERVICES WITH AUSTRIA


9Unit: in mil. EURSource: ÖNB

155 152

176

151

136

160

0

20

40

60

80

100

120

140

160

180

200

2016 2017 2018

Exports of Services to Austria Imports of Services from Austria

BILATERAL DIRECT INVESTMENTS


10Unit: in bn. EURSource: ÖNB

2,8 2,8

2,72,6

2,5

1,6

2,3 2,32,2

1,0

0,8

1,0

1,6

1,8

1,6

1,41,5

1,3

0,0

0,5

1,0

1,5

2,0

2,5

3,0

2010 2011 2012 2013 2014 2015 2016 2017 2018

Austrian FDI stock in Cyprus Cypriot FDI stock in Austria

BUSINESS OPPORTUNITIES FOR AUSTRIAN COMPANIES

• Tourism & Leisure infrastructure and supplies

• Business services

• Energy hub: Oil & Gas exploration and transport

• Construction, renovation of residential, administration and office buildings

(e.g. new parliament)

• Road construction, redevelopment, improvements

• Railway infrastructure (tramline in Nicosia?)

• Renewable energy sources

• Environmental technology (waste/water treatment)

• Franchise concepts (retail)

• Smart/EcoCity projects

• Medical tourism facilities

• Recruitment of human capital in STEM

• Never give up: Cyprus United?!


11

© 2019 - GoldNews.com.cy

• Up to 227 billion cubic meters

• Expected worth at 30-40 billion euros

• Drilling by ExxonMobil in Block 10 of the EEZ

• Turkey immediately filed claims

12


GAME CHANGER GAS DISCOVERY?

Block10

• 2011 - Discovery of Aphrodite gasfield• by Noble Energy, Royal Dutch Shell and Delek Drilling

• Estimated reserves: 3.6 to 6 tcf

• Production expected to begin 2024/25

• 2015 - Discovery of Zohr gasfield• Off the shore of Egypt by ENI

• Largest gas discovery ever made in the Mediterranean

• with reserves of 30 tcf

• December 2017 – Beginning of production at Zohr• Helped Egypt to recover its self-sufficiency

• New phase of exploration in Egypt’s offshore waters

• leading to further discoveries

• Egypt now produces a record 6.3 billion cubic feet ofgas a day - up by more than 30 percent since 2016

• making it one of the biggest producers in North Africaand the Middle East

• February 2019 - ExonMobil announcement• Substantial gas discovery in offshore Cyprus Block 10

• Double the country´s estimated offshore resources 13


ENERGY HUB CYPRUS

© 2017, CYPRUS HYDROCARBONS COMPANY

Zohr

Offsh

ore

Gas D

iscoverie

s

SUBSEA PIPELINE BETWEEN CYPRUS AND EGYPT vsVASILIKOS LNG TERMINAL

• in September 2018 Cairo and Nicosia signed an agreement to build a direct subsea pipeline • for the export of gas from the Aphrodite gas field to LNG plants in Edku or Damietta in Egypt

• and its re-export to various markets• the only two large-scale gas export terminals in the eastern Mediterranean

• Capacity of 19bn cubic meters a year

• Part owned by Royal Dutch Shell and Eni

• Estimated cost: $800m – €1bn

• Approval by Cypriot parliament in April 2019

• Alternative: Cypriot LNG Vasilikos project with an estimated total cost of €500 million• in 2016 following the completion of a feasibility study the government of Cyprus decided to proceed with the development of a LNG

terminal in Vasilikos Bay, near Limassol

• in October 2018 the government launched a tender calling for the construction of the facility by November 30, 2020

• Capacity: 1.3 mtpa, 0.19 bcfd (import)/5.0 mtpa, 0.72 bcfd (export)

• the European Commission is supporting the project with funding of €101 million

• Eastern Mediterranean Gas Forum• Recently formed by Egypt, Cyprus, Greece, Israel, Italy, Jordan and the Palestinian Authority

• in an effort to create a regional gas market, cut infrastructure costs and offer competitive prices

• bringing together underused and scalable export infrastructure with several promising fields is the key to unlocking untapped regionalpotential


14

15


TAP

• Length: 1,900 km

• Depth: 3000 meters

• will begin in the natural gas fields off the coast of Israel

• continue via Cyprus and Crete to the Peloponnesian peninsula

• on mainland Greece the pipeline will meet the planned “Poseidon”

pipeline (300 km) which will end in Oradea, Italy

• Capacity: 10 billion cubic meters (BCM) per year to the EU

• 10-15% of the EU’s projected natural gas needs

• Capacity could double

• Estimated cost: >€6bn

• US Geological Survey has projected that enough gas will eventually

be found in the eastern Mediterranean to meet regional and

European power demand for decades

THE EASTMED PIPELINE: FROM THE EASTERN MEDITERRANEAN TO EUROPE

The East-Med pipeline (IGI Poseidon)

EUROAFRICA POWER INTERCONNECTOR

• Signed in May 2019

• between Cyprus based firm EuroAfrica and Egypt

• an estimated 2 billion euro deal

• 300 km subsea electricity cable

• 1st power interconnector between Africa and EU

• Implementation: 36 months from start of construction

• Capacity: 1,000MW

• can be upgraded to 2,000MW at a later stage


16

BREXIT EFFECT?


17

311

375

540

388

503

603

209 211

128

322

168 166

891 872

1.041

1.158

1.254

1.328

0

200

400

600

800

1.000

1.200

1.400

2013 2014 2015 2016 2017 2018

IMPORTS OF GOODS FROM UK (in mil. EUR) EXPORTS OF GOODS TO UK (in mil. EUR)

Tourist arrivals from UK (in thousands)

Refe

rendum

Source: Cystat, Eurostat

NEXT EVENT IN CYPRUS – BUSINESS MISSION ON TOURISM14. – 16.10.2019


18www.wko.at/service/Veranstaltung/Zypern/WiMi/Tourismus

https://www.wko.at/service/Veranstaltung.html?id=a90f9b06-174e-48cc-93f9-a9cec1beecd8

Thank you for your attention!

Dr. Gerd Dückelmann-Dublany

Österreichisches AußenwirtschaftsCenter Athen

T +30 210 884 37 11

E [email protected]

W wko.at/aussenwirtschaft/zy

mailto:[email protected]

http://wko.at/aussenwirtschaft/gr

Documents

Dr. GERD DÜCKELMANN-DUBLANY - WKO.at€¦ · The market potential of Cyprus TAP • Length: 1,900 km • Depth: 3000 meters • will begin in the natural gas fields off the coast