ijems|scientificarticle
GasDiscoveriesinCyprus:
TheLimitsofRussianInfluence
péterkacziba
UniversityofPécs,Hungary
kacziba.peter@pte.hu
OffshoregasdiscoveriesaroundCyprushavebroughtseveralex-
ternalactorstotheregion.EnergycompaniesfromtheEuropean
Union,theUnitedStatesandtheMiddleEastacquiredexploration
rightsandobtainedstakesinprojectsofinfrastructuraldevel-
opment.Whileenergygiantstiedtotheseactorssecuredimpor-
tantsharesinthecurrentlydevelopingGreekCypriotgasindus-
try,Russiaisnotablyabsentfromthebeneficiaries.Theabsence
isparticularlynoteworthyasRussiahasotherwisedevelopedsig-
nificantenergydealswithotherregionalactorsandexertsexten-
siveeconomicinfluenceovertheRepublicofCyprus.Thisstudy
seekstoexaminewhytheRussiangasinvolvementdidnotma-
terialiseinCyprusandwhyMoscowremaineddistantfromthe
GreekCypriotgasopportunities.Itarguesthatnotonlysystemic
butalsodomesticfactorsconstrainedtheexpansionofRussian
gasinterests.Tounpackthecausesofthisabsence,thepaperap-
pliesthetheoryandanalyticalframeworkofneoclassicalrealism
andinterpretsforeignpolicyoutcomesthroughthelensesofsys-
temicanddomesticvariables.ThestudyconcludesthatMoscow
sacrificeditsgasopportunitiesinCyprusduetoseveralstructural
andunit-levelfactors,includingrecognisingTurkishinterestsin
theisland’senergydisputes,protectingtheregionalstakesofna-
tionalenergycompanies,andmaintainingRussianpositionsin
theGreekCypriotfinancialsector.
KeyWords:Russia,Cyprus,EasternMediterranean,geopolitics,
naturalgas,neoclassicalrealism
introduction
GasexplorationsintheExclusiveEconomicZones(eez)ofCyprus
havebeenattheforefrontofinternationalattentionsince2010.Al-
thoughtheglobalsignificanceoftheprovenvolumeislimited,the
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PéterKacziba
gasfieldsofAphrodite,CalypsoandGlaucusstillpossessconsider-
ableregionalsignificance(Tzimitras2019;Evaghorou2020;Marke-
tos2021).Studiesexaminingthegeopoliticalimplicationsofthis
regionalsignificancehavereviewedseveralaspectsandcausesof
energydisputes,thefeasibilityofmultilateralpartnershipsandvi-
abilityofexportoptions(Gürel,Mullen,andTzimitras2013;Kir-
işci2014;Tagliapietra2014;Ellinas,Roberts,andTzimitras2016;
Demiryol2019;Ersoy2019;Tziarras2019a).Inadditiontoregional
stakeholders,theroleofexternalactorshasalsobeeninvestigated,
revealingprospectsofEuropeangasdiversification,andanalysing
potentialbenefitsanddrawbacksofincreasingusandChinesein-
fluence(Mavroyiannis2014;Tagliapietra2016;Tsakiris2018;Crop-
seyandBrown2014;Özdemir2020;Marketos2021).
Beyondotherregionalandglobalactors,theliteraturehasalso
detectedanexpandingRussianinfluencethathasestablishedasig-
nificantpolitical,economic,andculturalpresenceintheRepublicof
Cyprus(roc)(Melakopides2016;Zavyalovaetal.2019;Mallinson,
Kanevskiy,andPetasis2020;Pritchet2021;Stronski2021).Withan
extensiveandmultisectoralinfluence,itcouldbeassumedthatRus-
sia,atopsupplierintheglobalgasmarket,alsoplaysaprominent
roleintheemergingGreekCypriotgasindustry.Theassumption
maybefurtherreinforcedbyRussia’sregionalinvolvementsthat
havegainedsignificantinterestsintheEgyptian,Lebanese,andSyr-
ianoffshoregassectors.Incontrast,however,Cyprusseemstobe
differentfromtheseexamples,asinthiscasetherewasnosignifi-
cantRussianinterventioninthecurrentlydevelopinggasindustry.
Theliteraturehasrepe atedlydrawnattentiontothelackofbilateral
gascooperationandunderlinedthenotableabsenceofRussianin-
volvement(Paraschos2013;Stergiou2019;Evaghorou2020).
Thisstudyseekstoinvestigatethisanomalybyapplyingthethe-
oreticalandmethodologicalframeworkofneoclassicalrealism.It
attemptstounderstandthecausesoftheabove-mentionedincon-
sistencyandinvestigatetheunderlyingcausesoflimitedRussian
involvement.ItaskswhyMoscowhasnotdevelopedclose(r)gas
cooperationwiththeroc,despitehavingextensiveinfluenceover
severalsectors,includingfinancialservicesandtourism.Thepaper
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GasDiscoveriesinCyprus
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positsthatawidesetofsystemicanddomesticfactorsconstrained
theimplementationofclassicalandstructuralrealistlogics,which
wouldhaveentailedamoreextensiveRussianinvolvement,withef-
fortstoaccumulatepowerpotentialsandcontrolemergingcompeti-
tors.Toachieveitsobjectives,thestudyfirstselectsthetheoretical
andmethodologicalframeworkofneoclassicalrealism,whichhas
beenrecentlyappliedtounderstandbothGreekCypriotandRus-
sianforeignpolicies(Kropatcheva2012;Romanova2012;Beckeret
al.2016;Tziarras2019a;ZachariadesandPetrikkos2020).These-
lectionofthetheoreticalbackgroundisacriticalstageoftheinves-
tigation,asneoclassicalrealismcannotonlyrevealsystemiccauses
butalsoreflectsontheinterventionofdomesticvariables.Equipped
withsuchadualanalyticalfocus,thepaperthenexplorestheglobal,
regional,andlocal(GreekCypriot)trendsofRussiangasaffairs.Sys-
temicandunit-levelfindingsareconnectedtoforeignpolicyout-
comesinthediscussionsection,whereinthepaperseekstoidentify
correlationsbetweenempiricalfindingsandpolicychoices.Atthe
end,thepaperseekstodrawconclusionsbylistingforeignpolicy
implications.
theoreticalandmethodological
background
Energydepositsplayimportantrolesintherealistarguments,hence
bothclassicalandstructuralrealistsacknowledgetheirsignificance.
Theyclaimthatcontrolofenergyisimportantforbothexporting
andimportingstates,asitincreasestheirsecurityandreducesthe
negativeeffectsofanarchy.Theclassicalrealistapproachconsiders
energydepositsaspotentialsourcesofpowermaximisationandre-
gardsthemasstrategicsupplies(Morgenthau1948).Asinthean-
archicinternationalsystem,thestruggleforpowerandsecurityis
continuous,states,drivenbytheresponsibilityofnationalsurvival
andthedesiretodominate,seektomaximisethecontrolofmate-
rialcapabilities,includingenergyresources(Česnakas2010).Great
Powersareparticularlyinterestedincontrollingmaterialresources
astheirmotivationsaredefinedbyeffortsofpowermaximisation
andinterestincoveringthecostsoftheirleadingpositions.Accord-
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PéterKacziba
ingtoRobertGilpin(1981,156),‘[a]lthoughcontroloveraninter-
nationalsystemprovideseconomicbenefits(revenues)tothedom-
inantpowerorpowers,dominationalsoinvolvescostsinmanpower
andmaterialresources.’Thestructuralrealistexplanationmaintains
thisview,althoughitamplifiestheinfluenceandimpactofsystemic
effects.Itarguesthattheasymmetricdistributionofcapabilities
differentiatesbetweeninternationalactors,andthusenergyabun-
danceorabsencemayenhanceorweakenstates(Waltz1979).While
allstatesconcentrateonnaturalresources,bothclassicalandstruc-
turalrealistsgivespecialimportancetogreatpowers,fromwhom
hegemonicenergypoliciesareexpected.Accordingtothestructural
realistperception,newlydiscoveredhydrocarbondepositsrepresent
particularimportanceforhegemons,which‘havetomakesurethat
ifthepieisexpanding,theyaregettingatleastsomeportionofthe
increase’(Mearsheimer2001,52).
Consequently,theabsenceofhegemonicbehaviourwouldcer-
tainlycontradictthetraditionalrealistarguments.AsČesnakas
(2010,39)putsit,‘[c]lassicalrealismcannotexplainwhystatescon-
trollinggreatreservesofenergyresourcesdonotusethemastools
forpowerexpansion.’Theliteratureexplainsthepresenceofsuch
anomalieswithhumanintervention.Högselius(2019,81)believes
thatindividualsinenergyaffairsmaintain‘theirownspecificworld
views,agendas,visions,moodsanddesires’and‘donotnecessarily
followanyrationalalgorithms.’Amongthetheoriesdealingwith
humanintervention,thispaperemploysthetenetsofneoclassical
realism.
Whilestructuralrealismclaimsthatsystemicdynamicsareeno-
ughtoexplaincoredevelopmentsofinternationalrelations,neo-
classicalrealismarguesthatnationalpowerandsystemicpositions
aretranslatedtoforeignpolicyoutcomesthroughthelensesofdo-
mesticvariables(Baylis,Smith,andOwens2008).Rose(1998),who
coinedthetermneoclassicalrealism,arguesthatforeignpoliciesare
notdrivenonlybymaterialcapabilitiesandpositionsintheinter-
nationalhierarchybutalsointernalfactorswhosepolicychoicessig-
nificantlyinfluencestates’behaviour.Theirpresenceishighlyinflu-
entialastheirinterests,perceptionsandmotivationsinfluencehow
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statesreacttosystemiceffects(Wohlforth1993;Schweller1998).As
Zakariademonstrates(1998),‘manystatesdonotmaximizetheir
influenceconstantly,’asnationalleadersareoftenconstrainedby
domesticpressuresthatforcethemtoshareavailableresourcesbe-
tweenthedomesticandinternationalspheres(Zakaria1998,83).An
alternativeapproachwasoutlinedbySchweller(2004)whobelieved
thatunderbalancingandconsequentstrategicmistakesarethere-
sultsofdecisionsandfailuresofdomesticactorsextendingfrom
elitetosociety.Inthissense,andregardlessoftheoutcome,do-
mesticvariablesareinterveningunits,linkingsystemiclevelsand
materialcapabilitiestointernalfactorsofforeignpolicychoices.
Althoughtheirfootprintissignificant,thepresenceofinternalfac-
torshasnotdiminishedtheneorealistroleofsystemiclevelbut
ratherproducedananalyticalframeworkinwhichforeignpolicy
outcomes(dependent)areinterpretedthroughthelensesofexter-
nal(independent)anddomestic(intervening)variables(Ripsman,
Taliaferro,andLobell2016).Moreover,neoclassicalrealismhasnot
onlybridgedexternalandinternallevels,butalsothetheoriesof
foreignpolicybehaviourandinternationalpolitics(Smith2018).
AccordingtoRipsman,Taliaferro,andLobell(2016),contemporary
neoclassicalrealismgoeswellbeyondtheoriginaltaskofaddressing
foreignpolicybehavioursandhasbecomeacomprehensivetheory
ofInternationalRelations(ir).
Buildingonthesetheoreticalarguments,thepresentpaperseeks
tounderstandhowtheneoclassicalrealistframeworkexplainsthe
limitedRussiangasinfluenceinCyprus.Intermsofhypothesis,it
arguesthat systemic and domestic variablesboth constrainedtheoth-
erwisepredictableRussianinvolvementintheGreekCypriotgasaffairs,
thusforcingnationalstakeholderstostayawayfromtheseeminglyben-
eficial opportunities.Totestthehypothesis,thestudyappliesthe
analyticalframeworkestablishedbyRipsman,Taliaferro,andLo-
bell(2016,33–98)andseparatesanalysingsectionsatthesystemic,
theunit,andthelevelsofforeignpolicyoutcomes.Withinthesys-
temicsection,thepaperalsodistinguishesbetweentheglobaland
regionallevelsofrelativepowerdistributionandsystemicclarity.
Relativedistributionofpowerreferstotheallocationandhierar-
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PéterKacziba
chiesofglobalandregionalpowercapacities(pp.34–8),inthecase
ofthepresentstudy,itreferstoRussia’spositionsintheglobaland
regionalgeopoliticsofnaturalgas.Systemicclarityconcentrateson
thethreatsandopportunitiesthatinfluenceRussiangasdiplomacy
(pp.46–52).Turningtowardstheunitlevel,theliteraturedifferen-
tiatesbetweenvarioustypesofinterveningvariables(pp.33–79).
Amongthese,thefactorsofstrategicculture,leaderimages¹and
domesticinstitutionsareexaminedhere.Externalandinternalvari-
ablesareconnectedinthesectionofForeignPolicyOutcomeswhich
includesadiscussionsectionaswell.Sinceamultidimensionalanal-
ysisisbeyondthescopeofthepaper,itfocusesmainlyonthepo-
sitionsoftheRussiangassector,discussingotherareasofbilateral
relationsonlyattheunitlevel.
thegloballevel:russianrole
inthegeopoliticsofnaturalgas
Russia’sglobalpositionsinthe relative distribution of powerare
greatlyinfluencedbyitsvastgasreserves.Currently,Russiahasthe
largestprovennaturalgasreservesintheworld,representingabout
20oftheglobalprovedquantitiesin2020(bp2021).Theselarge
depositshaveprovidedaleadingpositioninthegasmarketsince
the1980s,withRussiansuppliesaccountingforanaverageof20
ofglobalexportsperannumbetween2011to2020.Pipeline-based
exportshavetraditionallybeencentredaroundtheEuropean²con-
tinent,whichhaspurchasedabout75oftotalRussiangasexports
duringthe2010s(table1).Inthecorrespondingperiod,Russianex-
portaccountedforanaverageof35ofannualEuropeanimports,
withthelargestnegativeswingin2012(29)andthelargestposi-
tiveshiftin2017(39).Allinall,between2011and2020,Russian
¹AccordingtoRipsman,Taliaferro,andLobell(2016,61–66),theterm‘leaderim-
ages’referstotheperceptionsandbeliefsofindividualdecision-makers.
²Geographicalclassificationsarebasedontheterritorialdivisionofbpstatis-
tics,inthiscase,EuropereferstoEuropeanmembersoftheoecdplusAlbania,
Bosnia-Herzegovina,Bulgaria,Croatia,Cyprus,Georgia,Gibraltar,Latvia,Lithua-
nia,Malta,Montenegro,NorthMacedonia,Romania,SerbiaandUkraine.For
moreinformationseebp(2021,69).
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GasDiscoveriesinCyprus
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table1 NaturalGasExportVolumes–SelectedIndicators,2011–2020(bcm)
    
RussianGasExporttoNon-
Europeanstates
. . . . .
RussianGasExporttoEurope .  . . .
TotalGasExportofRussia . . . . .
TotalEuropeanGasImport . . . . .
TotalGlobalGasExport . . . . .
    
RussianGasExporttoNon-
Europeanstates
. . . . .
RussianGasExporttoEurope . . . . .
TotalGasExportofRussia . . . . .
TotalEuropeanGasImport . . . . .
TotalGlobalGasExport . . . . .
notes Adaptedfrombp(2012;2013;2014;2015;2016;2017;2018;2019;2020;
2021).
supplyquantitiestoEuropegrewbyanannualaverageof3.7,their
shareofEuropeanimportmarketshaveincreasedby6.4,whilethe
continent’stotalgasimportsgrewbyanaverageof2.5peryear(bp
2012;2013;2014;2015;2016;2017;2018;2019;2020;2021).
Althoughmodestgainscanbeviewedaspositivedevelopments,
theshareofRussiangasexportstonon-Europeandestinationshas
beenonadecliningtrendandonlyslightlyincreasedin2020(ta-
ble1).Thereductionwasassociatedwiththerecentgasdiscover-
iesinthepost-Sovietspace(e.g.Azerbaijan,KazakhstanandTurk-
menistan),whichwasatraditionaldestinationofRussianresources.
Anotherreasonistheemergenceofnewcompetitors.Accordingto
Kutcherovetal.(2020,1),the‘silentrevolutionofshalegas’hasre-
shapedtheglobalgasmarket,leadingtotheemergenceofnewcom-
petitors,loweringprices,andtheformationofnewtechnologiesand
supplyroutes.AlthoughRussiahasincreaseditsproductioncapac-
itytorespondtothesechallenges,the2.4growthratebetween
2009and2019wasfarbelowtheusrate(table2).Inaddition,new
competitorssuchasIran,Canada,Qatar,ChinaandAustraliahave
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table2 MarketsharesandGrowthRatesinGlobalGasProduction:
SelectedIndicators
Country ShareofGlobalProduction Growthrateperannum
  – –
usa . . . .
Russia . . . .
Iran . . . .
Qatar . . . .
China . . . .
Canada . . . .
Australia . . . .
Norway . . . .
Algeria . . . .
Malaysia . . . .
Indonesia . . –. –.
uae . . . .
Egypt . . . .
Nigeria . . . .
notes Adaptedfrombp(2019,34;2020,36).
alsoproducedhighergrowthratesanddevelopedeffectivelngex-
porttechnologies(Klare2017,35).Inthecaseofthelatter,Russia
isalsolaggingbehind,despitehavingincreaseditslngexportsby
anannualgrowthrateof19between2011and2019andcontrol-
lingaround8.3ofthegloballngexportsin2020(Klare2017,35).
Allinall,Russiangasproductionrepresentedabout18.5oftotal
globalproductionin2011,and16.6in2020(bp2012;2021).
Supplyrouteshavealsobeguntochangeintherecentperiod
duetotheshalegasrevolution,thespreadoflngtechnologies,
theemergenceofnewconsumers,diversificationpolicies,andthe
destabilisationoftraditionaltransferregions.Russia’sself-inflicted
conflictsarealsoproblematicinthisrespect,as,forexample,the
Russian-Ukrainianconflictmakesthedevelopmentofnewpipeline
links(e.g.TurkStream,NordStream2)essential,andthussignifi-
cantlyaffectsMoscow’senergyandforeignpolicies(Sziklai,Kóczy,
andCsercsik2020).AlessRussia-dependenttrendisthegrowthof
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Asiangasconsumption,whichincreasestheimportanceofthese
marketsandforcesMoscowtogainstakes(Taghizadeh-Hesaryetal.
2021).Inthiscase,however,existingpartnerships,emergingcom-
petitors,andthelackofexportinfrastructureareallhinderingRus-
sianefforts.Despitedevelopingpipelinesandusingnewlngcapac-
ities,Russiastillhasaweak,thoughslightlygrowingmarketsharein
Asia.Between2011and2020,Russiaexportedanaverageof17bcm
ofnaturalgasperyeartotheAsia-Pacificregion,mainlyintheform
oflng.Pipelinesupplieshavebeguntoplayanincreasinglyimpor-
tantrolewiththeinterconnectionofRussian(PowerofSiberia)and
Chinese(Heihe-Shanghai)pipelinesandwiththedeliveryof0.3bcm
toChinain2019and3.9bcmin2020(bp2020;2021;LiuandXu
2021).Insum,Russia’sshareoftheAsianmarketaveragedaround
5duringthelastdecade(bp2012;2013;2014;2015;2016;2017;
2018;2019;2020;2021).
Turningtothecomponentsof systemic clarity,itcanbestated
thatRussia’sglobalgaspositionsmaybereinforcedbysomeon-
goingtrends,whilealsocanbeconstrainedbycertainprevailing
threats.Whenbrieflysummarizingglobal opportunities,itisagain
importanttoemphasizeRussia’ssignificantgasreserves,asboth
energyconsumptionandgasdemandhaveslowlyincreasedinre-
centyears,hencefavouringcountrieswithlargedeposits.Accord-
ingtobp’sstatistics,globalprimaryenergyconsumptiongrewby
1.9between2009and2019(bp2021).Naturalgashasbeenplay-
inganimportantroleinenablinghigherconsumption,forexam-
plein2019,about36oftheadditionaldemandwasprovidedby
newnaturalgassupplies(InternationalGasUnion2020).Covering
largeproportionsofconsumptiongrowth,theshareofnaturalgas
inprimaryenergydemandhavealsoincreasedslowlyintheprevious
decade,representingabout21oftotaldemandin2010,22in2015
and23in2019(InternationalEnergyAgency2020a).Accordingto
thecalculationsofiea,theslowexpansionwillcontinueinthefu-
turewitharound1.7ofdemandgrowthbetween2019and2025
(InternationalEnergyAgency2020b).Accordingtothesamesource,
Moscowwillplayacrucialpartinsupplyingthedemandgrowth,and
itsexistingandnewgasfieldswillsolidify‘Russia’spositionasthe
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world’slargestnaturalgasexporter’(InternationalEnergyAgency
2020b,48).
TheseRussianopportunitiesaresignificantlythreatenedbysome
globaltransformations.Oneofthemostimportantthreatsisthe
emergenceofnewsuppliersandnewlydiscoveredgasresources,
whicharereshapingthemarketandunderminingthecurrentpo-
sitionsofRussia(Grigas2017).WhileMoscow’scorecompetitors
arestilllaggingbehind,theprovenreservesofIran(32tcm),Qatar
(24.7tcm)andTurkmenistan(19.5tcm)indicatethatlarge-scaleex-
plorationsareprovidingmoreandmoreopportunitiesforcompeti-
tors.Atthesametime,theincreasingcompetitionaffectedprices
anddevelopedtwocontrastingtrends.Thefirsttrendwascharac-
terizedbylowpricesandabundantresources,whilethesecondwas
markedbyhighdemand,relativescarcityandskyrocketingprices.
Thefirsttrend,whichrepresentedtheperiodbetweenthemid-2010s
andsummerof2021,affectedMoscowparticularlynegatively,as
theshareofoilandgasproductionintheRussianeconomyhasin-
creasedfrom34in2010to38in2018(Franco2021).Thesecond
trendisunfoldingsincemid-2021duetotheAsianovertakeoflng
supplies,relativescarcityinEuropeandcutsofspotmarkettop-
upsalesbyRussia(OxfordAnalytica2021).Thechangesmayben-
efitMoscowintheshortrun,but,atthesametime,couldforceeu
consumerstofurtherdiversifytheirsupplysources.Thepossibility
threatensRussianpositionseveninthemid-run,asadaptingeu
countriesmayfurtherprioritisealternativesuppliersandexploit
thelngpotentialsofemergingNorthAmerican,MiddleEastern
andCentralAsianpartners.
theregionallevel:russianroleinthe
easternmediterraneangasdynamics
GlobalpositionsindicatethatEuroperemainedthemostimportant
marketforRussiangasinthe2010s,thoughtheroleofalternative
regionshasbeguntogrow.Thesecircumstanceshavealsoincreased
theimportanceoftheEasternMediterraneanwheregeopoliticalre-
configurationscausedsignificantchangesintherelativedistribution
ofpower.AccordingtoTziarras(2019b,5),recentregionaldynamics
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arecharacterizedbyenergydiscoveries,geopoliticalantagonism,
newimbalancesofpower,newsecurityimperatives,andincreas-
inginterestsofexternalpowers.Russiaplaysanactiveroleinall
oftheseprocesses,althoughtheextentofitsinfluencefluctuates.
Moscowtakesproactivepositionsinregionalsecuritymeasures(e.g.
militaryinvolvements),economicaspects(e.g.armstrade),anden-
ergydevelopments(Pritchett2021;Stronski2021).Amongthevar-
iousregionalinterests,hydrocarbongeopoliticsplayasimportant
partassecurityaspectsoreconomicfactors.Consideringtheabove-
describedglobalcharacteristics,gasdiscoveriesareparticularlysen-
sitiveissuesforMoscow,providingopportunitiesandthreatsatthe
sametime.Opportunities,byofferingMoscowthepossibilityto
participateinthecurrentlydevelopingprojects,andthreats,byen-
dangeringRussia’sregionalandEuropeanpositionsthroughthe
emergenceofnewcompetitors.AccordingtoMamedov(2021,100),
Russiareactedtothesecontroversialdevelopmentsbysurveilling
andparticipating‘inthemostpromisingenergyexploration,pro-
ductionandexportprojects.’However,aswillbepresentedinthis
section,theseinitiativeshaveproducedmixedresults,enhancing
Moscow’senergyinfluenceinsomeregionalcountrieswhileincreas-
ingfearsofexternalinterferenceinothers.
Tocontinuewiththeexactdetails,Russianenergyexportshave
traditionallybeenmoderateintheEasternMediterraneanregion.
Between2011–2019,thelargestrecipientwasTurkey,followedby
Greece,purchasinganaverageof12ofRussia’stotalexportsin
the2010s(Gazprom2019;2020a).Intheperiodbetween2011–
2019,Gazpromsuppliedatotalof23.1bcmofnaturalgastoGreece,
whichwasequivalentto63oftheGreekgasconsumption.Bilat-
eralenergyrelationsbegantodeterioratein2014,whenoilexports
toGreecefellsharply,partlyduetoeusanctionsagainstMoscow,
andpartlyduetothedropofoilpricesandabundanceofsupply
sources(Kuznetsovetal.2017;Pritchett2021).Althoughthevol-
umeofgasimportshasnotfallenassteeply,fromthisperiodon-
wardsGreece’sgoaltodiversifygassuppliesbecamemoreapparent.
Moreover,Athenshasrepeatedlyside-linedoffersfromRussian
companieswishingtoinvestintheprivatizationoftheGreekgas
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table3 Valueofmineralfuel*importfromRussiaintheEastern
Mediterranean,2010–2019(millionusd)
Year Greece Turkey Cyprus Syria Lebanon Israel Egypt
       .
       .
    .   
    .   
    .   
    .   
    .   
    .   
    .   
    .   
notes *Harmonizedcommoditydescriptionandcode:hs2,id527.Basedon
datafromtheObservatoryofEconomicComplexity(https://oec.world).
sector.ExamplesofrejectionextendfromSintezbiddingfordesfa
(PublicGasTransmissionSystemOperator),throughGazpromof-
fering€2billionfordepa(PublicGasCorporationofGreece),to
elpe’s(HellenicPetroleum)privatizationrulesrestrictingthepar-
ticipationofRussiancompanies(Taylor2012;EnergyPress2018).
Consequently,thelastyearsofthepreviousdecadewerecharac-
terizedbyambivalentRussiangaspositionsintheGreekmarket.
EpisodicachievementsincludedtheTurkStreampipelinebegin-
ningtoflowRussiangastoGreeceinJanuary2020,andGazprom
signingalong-termsupplycontractwithMytilineosinJune2020
(Gazprom2020b;Tsolova2020).Nevertheless,theimpactofthese
agreementsisgreatlyreducedbytheopeningofGasInterconnector
Greece-Bulgariain2020andthedevelopmentofanlngterminal
inAlexandroupolis,bothofwhichwillallowGreecetochannela
significantamountofalternativegasresources(Dimitrov2020).
RussiangaspositionsinTurkeyseemtobemoreideal,atleastfor
themoment.Takingthe2011–2020data,Turkeyisbyfarthemost
importantregionalpartnerforRussiangasinterests.Duringthe
period,Turkeypurchasedanaverageof11.1oftotalRussiangas
exports,whichamountedtoanaverageof24.3bcmgasperyear.This
ijems

GasDiscoveriesinCyprus
[15]
volumerepresented54ofallTurkishconsumption,withahigher
dependenceatthebeginningoftheperiod(2011:62;2012:62)
andamuchlowerattheend(2019:35;2020:36)(Gazprom2019;
2020a;bp2012;2013;2014;2015;2016;2017;2018;2019;2020;2021).
Turkey,apartfrombeingasignificantimporterofRussianoiland
contractingRosatomtobuildtheAkkuyunuclearpowerplant,is
alsoacrucialtransitroute(Winrow2017).Amongthegaspipelines
headingtoTurkey,BlueStreamandTurkStreamdeliverRussian
gaswithacurrentcapacityof47.5bcm/year(Gazprom2020a).The
capacitycouldtheoreticallycover100ofTurkey’sannualaver-
ageconsumption(46.7bcm).Inpractice,however,thisamountwill
notberealized,asTurkStreamwillalsosupplyothercountriesand
Turkeyaimstodiversifyitssupplyroutes.Inthisrespect,Ankara’s
optionsareenhancedbytheBaku–Tbilisi–ErzurumPipeline,the
Trans-AnatolianGasPipelineandtheTabriz–AnkaraPipeline,to-
getherrepresentinga55bcm/yearmaximumtransfercapacity.In
additiontopipelines,growinglngcapacityalsoreducesthepo-
tentialofRussiangasinfluence.Currently,threelngterminals
andfloatingunitscontributetoTurkey’sgasdiversification,whose
roleisillustratedbythefactthatin2019,Turkeyimported12.9
bcmlngthatwasequivalentto29ofitsannualconsumption
(bp2020).Thetrendhascontinuedin2020whenthecountryim-
ported14.8bcmlngcoveringabout32ofitsannualconsumption
(bp2021).
Intheabsenceofdirectpipelinelinks,Russiangashasamuch
lowermarketshareintherestoftheEasternMediterranean.The
onlysignificantlngexportsinrecentyearshavebeendeliveredto
Egypt,whereGazpromsuppliedatotalof6.8bcmofgasin2015–
2016(Gazprom2020a).Furthermore,RosneftalsoprovidedEgypt
withamoderateamountoflngpurchasedfrominternationalmar-
kets(Kazmin2016;Soldatkin2017).Inadditiontoexploitingcom-
mercialopportunities,Russiahasalsobeenfocusingonnewlydis-
coveredgasfields.RussianeffortsinthisregardsucceededinDe-
cember2016,whenenisoldits30stakeoftheShouroukCon-
cessioncontainingthegiantZohrgasfieldtoRosneft(ElBassoussy
2018).AsRosneftalsoowns10oftheoperatingcompany,theRus-
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siansharecanbeconsideredsignificantintheconcession,espe-
ciallywhentakingintoaccountthattheZohrfieldhasalreadypro-
vided68mcmdailyoutputinAugust2019(KiselyovaandSoldatkin
2019).
Althoughwithmuchlesssuccess,Russiancompanieshavealso
showninterestinIsraeligasdevelopments.Thishasbeenbasedon
acloseoiltradepartnershipthatpeakedaround2006whenRus-
siaandtheCommonwealthofIndependentStatessuppliedabout
88ofIsrael’soilimports(Nurieva2017).Asillustratedintable
3,thelevelofIsraelioildependencysignificantlydeclinedover
thefollowingdecade,yetthenewlydiscoveredgasfieldsstillpre-
sentedopportunitiesforRussiancompanies.Gazpromfirsttar-
getedtheTamarfieldandsoughttoacquiresharesinIsramco,which
owns29ofthegasfield(Yeshayahou2011).Afterunsuccessfulat-
temptswithTamar,GazpromturnedtowardstheLeviathanfield
andattemptedtosecuresharesintheproductionsector.Although
PresidentVladimirPutinhimselflobbiedfortheinvolvementof
aRussiangasgiant,thetenderwaseventuallyawardedtoWood-
sideEnergyofAustraliainDecember2012(Baev2014).Thus,the
onlystakesthattheRussianscouldsecurehasbeenproducedby
GazpromMarketing&TradingSwitzerland,aSwisssubsidiaryof
Gazprom,whichhassuccessfullysignedalong-termlngpurchase
andsalescontractinFebruary2013(Nurieva2017).
ThelimitedRussianperformanceinIsraelhasbeenlargelyas-
sociatedwithMoscow’sgainsinSyriaandLebanon,asneitherTel
AvivnoritsWesternallieshavebeeninterestedinsupportingre-
gionalRussianadvancesbygrantingsharesintheIsraeligassec-
tor.Moscow’sassistancetoBasharAl-AssadintheSyriancivilwar
wasatleastpartlycompensatedinDecember2013whenSyriahas
grantedSoyuzneftegaza25-yearconcessiontoa2190km2area
withinitseez.Althoughthecompanydroppeditsplansduetose-
curityreasons,Damascusagaingrantedexclusiveexplorationand
productionrightsinSyrianterritoriesforRussiain2017(Kodu-
vayurandEverett2019).Equippedwithsuchcomfortablepositions,
Russian-ledexplorationand/orproductionisscheduledtobeginin
2023(SalamehandChedid2020).Bes idespotentialexplorationsand
ijems

GasDiscoveriesinCyprus
[17]
provedSyrianreserves,thecountry’stransitpositionisalsocrucial
forMoscow.FromtheRussianpointofview,Syria’simportanceis
highlyincreasedbyitspotentialstohinderonshoregastransfer
fromthePersianGulfviaTurkeytoEurope(KoduvayurandEverett
2019).
TheRussianpresenceinSyriaisarathereffectivesteppingstone
towardstheslowlyevolvingLebanesegassector.Theinterconnec-
tionofRussianinterestsinbothcountrieswasdemonstratedby
Moscow’sofferinJune2019tomediatetheLebanese-Syrianmar-
itimedispute,whichcouldblockfutureeffortsofexploitation.Rus-
sianconcernsinthematterarelinkednotonlytoSyrianbutalsoto
Lebanesegaspositions:Afteralongandpostponedtenderingpro-
cedure,theLebanesegovernmentawardedtwoexclusivepetroleum
licensesfortheconsortiumofTotal,EniandNovatekinDecember
2017.AlthoughthedecisionfavouredmostlytheFrenchandItal-
iancompanies,Novatekstillowns20ofshares(SalamehandChe-
did2020).Russiancompaniesarealsoexpectedtoparticipateinthe
nextlicensingrounds,whilealsotryingtoobtainstakesinthecon-
structionandoperationofgasinfrastructure.Rosneft,forexample,
hasreportedlycompetedinapublictendertooperatefloatingstor-
ageandregasificationunitthatisexpectedtoeaseelectricityshort-
agesandthenbeusedfortransformingandutilizingdomesticoff-
shoreresources(RoseandBrown2019).
Tosummarisetheregionaloverview,overthepastdecade,Russia
hasbeenanactivestakeholderintheregion’shydrocarbongeopol-
itics.Russianintentionsweredefinedbythedualpoliciesofeither
directlyparticipatingintheregionalgasaffairsorindirectlyinflu-
encingthem.Nevertheless,EasternMediterraneanenergypolicies
haveundoubtedlyfunctionedaseastwardextensionsofRussia’sEu-
ropeangasinterests.AsStergiouputit,‘Moscowtriedtoundertake
pre-emptiveactionagainsteverythingthatcanundermineitshege-
monicpositionasenergy-providertotheEuropeanMarketsandthe
countriesoftheEasternMediterranean’(Stergiou2017,106).These
effortshaveproducedmixedresults,buttheyhaveundoubtedlyput
Russiaonthemapofregionalgasaffairs.ForMoscow,thetwomost
importantcountriesintheregionareSyriaandTurkey,theformer
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[18]
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mainlyforgeopoliticalandsecurityreasons,thelatterprimarilybut
notexclusivelyforeconomicandenergyconsiderations.Inaddition,
bothcountriesareimportantforgeographicalreasons,astheyare
positionedtohinderEurope’sdiversificationefforts.
Russia’scentralinterestinpreservingorenhancingitsEuropean
gaspositionshasalsoinfluenceditsattitudetowardsgasexplo-
rationsintheEasternMediterranean.Inthiscase,opportunitiesare
mainlylinkedtotheemerginggasmarket,asRussiangasgiantsmay
interveneandtakesignificantslicesfromregionaldevelopments.
Thepolicyofinvolvementcanbeobservedinalmostallcountries
intheregion,althoughRussiangasinfluencehaslargerimpacts
mainlyinGreece,Turkey,Syria,LebanonandEgypt.Inthesecases,
developingthegasindustryandinfrastructurehaveprovidedsev-
eralprospectsforRussiancompaniesscalingfromtechnicaltenders
tobusinessandfinancialopportunities.Withsuchgains,andbyus-
ingtheRussianstrongholdofSyria,Moscowexpectstoinfluence
regionalgasdevelopmentsandcounterbalancetheinterestsofits
competitors.
Inthecaseofregionalthreats,itisimportanttodistinguishbe-
tweencurrentandfuturerisks.Assessingthecurrentsituation,it
canbearguedthattheglobalsignificanceofEasternMediterranean
gasdiscoverieslagsfarbehindtheregionalimportance.Combined
regionalgasdiscoveries,includingestimatedones(table4),would
representfairlyabout 1.6oftotalglobalreserves,comparedto
Russianprovedreserveswhichmakeuparound20ofglobalre-
serves(bp2021).Withthisvolume,gasdiscoveriesintheEastern
MediterraneancouldmostlythreatenRussia’sregionalsuppliesand
wouldbelesscompetitiveintheEuropeanmarketduetomoderate
supplyquantities,technologicalandgeologicalchallenges,highcon-
structioncostsandprices.TheriskoflosingRussia’sregionalposi-
tionisalsoreducedbythefactthatTurkey,Russia’slargestgaspart-
nerinthearea,hasstrainedrelationswithmostpotentialsuppliers
intheregion,includingIsrael,EgyptandCyprus.Whilethismay
changeinthefuture,Russia’sinfluentialpresenceinSyriacouldeas-
ilypreventtheestablishmentofonshoreoroffshoregaspipelines
towardsTurkey.
ijems

GasDiscoveriesinCyprus
[19]
table4 OffshoreGasFieldsandDiscoveriesintheEasternMediterranean
Country Gasfield Discoveredquantities(bcm)
Egypt Zohr .
WestNileDelta .
Nour .
Nooros .
Atoll .
Baltim .
Israel Leviathan .
Tamar .
Tanin .
Karish .
Mari-B .
Noa .
Palestine GazaMarine .
Cyprus Aphrodite ∼.
Calypso ∼.
Glaucus ∼.
notes AdaptedfromBowlus(2020).
Whereasthecurrentsituationposesrelativelyfewthreatsfor
Russia,thefutureismuchmoreproblematic.Accordingtoesti-
mations,thecombinedreservesoftheLevant,theNileDeltaand
Herodotusbasinscontainatleast13225bcmofrecoverableundis-
coveredgas,whichwouldrepresentapproximately6.6ofglobal
resourcesin2019(usgs2010a;2010b;Eliaetal.2016).Whileit
isnotviabletodrawconclusionsfromundiscoveredquantities,
theestimationsstilldemonstratepossiblethreatstoRussianpo-
sitionsandunderlinetherisksofestablishingalternativeEastern
MediterraneansupplyroutestoEurope.Finally,itshouldbenoted
thatotherenergysourcesmayalsoundermineregionalgasdreams.
Fromtheseoptionsnuclearenergymayprovideopportunitiesfor
Russia(e.g.constructionofnuclearpowerplantsbyRosatomin
Akkuyu,TurkeyandDabaa,Egypt),howeverpublicdemandforre-
newableandgreenenergyresourcesmayratherservetheinterests
ofregionalandlocalactors(MehmetandYorucu2020).
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[20]
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theunitlevel:interveningvariables
influencingrussiangaspositionsincyprus
SystemiccontextsofRussiangaspositionsaregreatlyimpacting
Moscow’senergystrategytowardsCyprus.Followingthemethodol-
ogyofneoclassicalrealism,thissectionhighlightsthoseRussiando-
mesticfactorsthatinfluencedthePutinadministration’sdecision-
makingaboutCyprus.
TheKremlin’s strategic culturetowardsCyprusisrootedinthe
ColdWar.Sincetheestablishmentofroc,Russiaendorsedthe
maintenanceofanindependentanddemilitarisedCypriotstateand
consideredanyformsofGreekandTurkishpresenceontheislandas
attemptstosecureapermanentnatobase(Stergiou2007;Sakkas
andZhukova2013;Maslova,Zabelin,andMuntyan2019).After
closepoliticalconnectionsduringtheColdWar,bilateralcooper-
ationslowlybutsteadilyexpandedduringthe1990swhenMoscow
andNicosiahavedevelopedamultichannelpartnershipbasedon
dynamicdiplomatic,economicandculturalties.Astheopeningof
thenewera,therocformallyrecognisedtheRussianFederation
inApril1992andestablishedhigh-levelcontactsduringthevisitof
PresidentGeorgeVassilioutoMoscowinOctober1992(Krasnov,
Solovieva-Oposhnynskaya,andArtiukh2019).Between1992and
2000,bilateraltradevaluerepresentedanaverageof5oftheroc’s
totaltradevolumeperannum,comparedtotheperiodof2010–2019
whenRussia’saveragesharedecreasedto4(AtlasofEconomic
Complexity,n.d.).Perhapsmoreimportantly,theinfamousdouble
taxationtreatywassignedinDecember1998,allowingwealthyRus-
sianstoexploitGreekCypriotoffshoreopportunities(Zavyalovaet
al.2019).Sufferingfromtheusarmsembargosimposedin1987,
NicosiaalsosoughttocooperatewithMoscowinthedefencesec-
tor.Notableexamplesinthesefieldsextendfromcontracting41
Russiantankswithavalueof172millionusdin1996toorderings-
300surface-to-airmissilesystemswithavalueof230millionusdin
1997(Krasnov,Solovieva-Oposhnynskaya,andArtiukh2019;Stron-
ski2021).Anotherdrivingforceofcooperationwastheprotracted
divisionofCyprus,inwhichRussiausuallyadoptedtherhetoricof
GreekCypriotsandprovidedpoliticalsupportforthem,particu-
ijems

GasDiscoveriesinCyprus
[21]
larlyintheunSecurityCouncil.Russia’sstanceonprotectinglegal
frameworkshasalsoextendedtootherareas.ContrarytoTurkish
positions,Moscowupheldcompliancewithunconventionsonthe
lawofthesea,thusseeminglysupportingtheinterestsofNicosiain
theEasternMediterraneanmaritimedisputes.Inreturn,theroc
hasprovedtobetoleranttowardsMoscow’scontroversialforeign
policyactionsandwasoftenaccusedofrepresentingRussianinter-
estsintheeu(LeonardandPopescu2007;OrensteinandKelemen
2017;Stronski2019).Inaddition,Westernconcernshavealsobeen
relatedtostationingrequestsandparticularlytothecontinuing
pressuresonGreekCypriotstoallowtheestablishmentofRussian
militarypresenceontheisland.AlthoughNicosiahasrejectedthese
requests,MoscowhassecuredananchoringdealthatletRussian
navyvesselstorefuelandresupplyatGreekCypriotports(Stergiou
2019).
ThesehistoricalandcontemporarydynamicsoutlinetheRus-
sianstrategicculturetowardsCyprus.BoththeSovietUnionand
theRussianFederationviewed(andviews)theislandasanareaof
strategicimportance,enablingMoscowtocounterbalancenatoin-
terestsandpromoteitsinfluenceintheregion(Maslova,Zabelin,
andMuntyan2019).Russiahasthereforeseentheislandasa‘strate-
giccake’fromwhichtheWestern(uk,us)andregional(Greece,
Turkey)powershadalreadytakentheirsliceinthe1960sand1970s,
andtherefore,tomaintaintheregionalbalanceofpower,Russiahas
alsoarighttoclaimitsshare.Overthepastdecades,Russiahas
soughttolegitimisethisambitioninseveralways,includingseek-
ingtobecomeanofficialstakeholderofCypriotpeacenegotiations
or,liketheuk,claimingbasingareas.AstheWesternpowershave
categoricallyrejecteda de jurerepresentationinallcases,Russia
hasestablishedsector-specificinfluences.DuringtheColdWar,this
wasmainlylinkedtothecommunistpartyakel,whileintheearly
2000sitslowlyspreadtothefinancialsector(SakkasandZhukova
2013;Pritchett2021).
AlthoughRussiahasestablishedclosecooperationwithrocat
thebeginningofthe21stcentury,itiscrucialtounderlinethat
Moscowdoesnotoverestimatethesignificanceoftheisland.As
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[22]
PéterKacziba
highlightedearlier,TurkeyandSyriaarethemostimportantre-
gionalactorsforRussia,andthereforeitsubordinatesitsinterests
inCyprustothem.Thiscanbeseen,ontheonehand,intheat-
titudetowardstheCyprusconflict,inwhichRussiasupportsthe
GreekCypriotsrhetoricallybutinpracticedoesnotgoagainstvital
Turkishinterests.Ontheotherhand,itisalsoevidentinRussia’s
attitudetowardsCypriotgasdevelopments,inwhichMoscowdoes
notseektoopposeeitherTurkishoritsowninterests.Tosumup,
Russia’sforeignpolicyinCyprusreflectsMoscow’sglobalandre-
gionalstrategyanditisbasedonmaintaining(orestablishing)the
balanceofpowerandenhancingmultipolarity.
AsthestrategiesofRussia’svitalpolicyareasarefirmlycentral-
ized,itisreasonabletoclaimthattheprevioussectionalsoreflects
theRussianleaders’perceptionstowardsCyprus.Russianpresidents
havetraditionallymaintainedgoodrelationswithGreekCypriot
counterparts,largelyduetothecommonOrthodoxheritageand
thefactthatsomeoftheGreekCypriotleaderswereeducatedin
theSovietUnionortheEasternBloc(GeorgeVassiliou,Demetris
Christofias).Thisattitudeisreflectedinthefrequencyofhigh-level
visits,withRussianandGreekCypriotpresidentsmeeting13times
between1991and2019(Krasnov,Solovieva-Oposhnynskaya,and
Artiukh2019).Althoughthisislessthanthevolumeofeusummits
involvingGreekCypriotleaders,itismuchmorethanthenumber
ofmeetings(1)betweentheusandCypruspresidents.Moscow’s
greaterinterestsindicatethatRussianleadersattachconsiderable
importancetodevelopmentsinCyprus.
However,thisimportanceislimitedandselective.Statements
byPresidentPutinandForeignMinisterSergeyLavrovindicated
thatRussianleadershavethreeparticularlyimportantthemescon-
cerningCyprus:multilateralismandstrengtheningtheroleofthe
uninmaintainingstabilityandpeace;supportingbasicprinciples
ofinternationallaw;andfurtherenhancingofeconomicrelations
(Gotev2015;Christou2020;tass2020,2021).Whiletheselective
applicationoftheseissuesisitselfindicative,itisimportanttonote
thatRussiadoesnotnecessarilysupportGreekCypriotpositions
onthesethreeissueseither.ThisbecameapparentinSeptember
ijems

GasDiscoveriesinCyprus
[23]
2020,whenPresidentAnastasiadesaskedforRussianassistancein
themaritimedisputeswithTurkey,andthoughMoscowofferedme-
diation,itavoidedopenlysupportingtheGreekCypriotpositions,
ratherpromotingthesearchforcompromise(tass2021).
TheseselectivepositionsrevealthatRussianleadersareessen-
tiallytyingtheirCyprusstrategytoTurkey,andmorepreciselysub-
ordinatingtheirsupportforGreekCypriotstoRussianinterestsin
Turkey.InthemindsofMoscow’sleaders,themostimportantele-
mentofGreekCypriot-Russianrelationsisthereforeneithertheset-
tlementoftheCyprusconflictnortheemergenceofGreekCypriot
gasproduction,bothredflagsforTurkey,rathertheconservationof
island-widestabilitywhichalsoallowsthepreservationofRussian
economicandstrategicpositions(Baev2014).
WhileinthetheoreticalframeworkofRipsman,Taliaferro,and
Lobell(2016)theperceptionsofleaders(or‘leaderimages’)referto
thebeliefsandperceptionsofindividualdecision-makers,domes-
ticinstitutionscoverwiderangesofstatestructures,informalin-
stitutionsandprocessesaffectingdecisionsofpolicymakers.When
analysingtheinfluenceofRussian domestic institutionsinCyprus,
theroleoffinancialandenergysectorsrequiresspecialattention.
Bothsectorsincludepublic,corporate,andmixedactors,andasa
resultoftheformalandinformalconnectionstogovernmentcir-
cles,theseactorshaveanimpactonRussiandecision-makingpro-
cesses.TheRussianfinancialsectorhastraditionallyviewedtheis-
landasakeydestinationandanoffshorehaven.AftertheGreek
Cyprioteconomiccrisis(2013–2014)theEuropeantroikasoughtto
endoffshoreopportunitiesasaconditiontoits€10billionbailout,
however,thesesetsofrationalizationeffortshaveproducedmixed
results.AccordingtotheCentralBankofRussia(2021),theaccu-
mulateddirectinvestmentstoCyprusstillamountedto178billion
usdatbeginningof2021,representingabout40ofthetotalRus-
sianoutwardinvestments.Inthecorrespondingperiod,directin-
vestmentsfromCyprusamountedto156billionusd,whichcon-
stitutedaround29ofthetotaldirectinvestmentsinRussia.These
figuresshownosignificantdivergenceinthecaseofoutwardinvest-
mentsfromRussiatoCyprus,butsignalsomenegativechangesin
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[24]
PéterKacziba
thecaseofinwardinvestmentstoRussiafromCyprus(figure1and
figure2).
ComparedtothestatisticsrecordedbeforetheGreekCypriot
economiccrisis,investmentsoriginatingfromCyprusrepresented
anaverageof34oftotalinvestmentsinRussiabetween2009–
2013,while,inthesameperiod,RussianinvestmentstoCyprus
amountedtoanaverageof37ofthetotaloutwardinvestments.
ThedecreasingvalueofoutboundCypriotinvestmentsindicates
thatthecomfortableRussianpositionsintheGreekCypriotfi-
nancialsectorbegantochange,partlyduetoWesternpressureon
Nicosia,partlyduetotheKremlin’smonetarydecisionstoincrease
taxondividendsearnedinoffshorehavens(Zavyalovaetal.2019;
Tokarev2021).Thefirstresultsofthesechangesarealreadybeing
feltinCyprus.AccordingtotheCentralBankofCyprus(2021),the
valueofdepositsownedbynon-eucitizensdecreasedfrom21,5bil-
lioneurin2012,to11,8billioneurin2014,andto6,2billionin
August2021.Theoutflowofnon-eucapitalissignificant,though
doesnotincludethoseRussianswhoinvestedatleast2millioneur
inrealestateandreceivedCypriotcitizenship(Stronski2021).Ac-
cordingtoPritchett(2021),abouthalfofthe3153Cypriot‘golden
passports’issuedbetween2013and2020weregrantedtoRussian
citizens,therebyreinforcingtheRussianminoritythatamounted
to5–6ofthetotalpopulationin2018(Stergiou2019).
Besidesthefinancialsector,anothertraditionallylucrativebusi-
nesswasenergy,aselectricitygenerationinCyprusismainlyoil-
based,withRussiansourcesplayingaprominentrole.Cyprushas
traditionallybeenonethemostdependentregionalactorsonRus-
sianmineralfuel,withanaverageof19ofitsresourcesoriginating
inRussiabetween2010and2018.Thissituationhasbeenchallenged
bythediscoveryofCypriotgasontheonehand,andtheexpansion
ofWesternenergyinterestsinCyprusontheother.Asinthecaseof
Greece,importsofRussianmineralfuelstorochavealsodecreased
since2014,representinganaverageof13sharebetween2015and
2018.WhiletheselosseswillnotknockoutRussia’soilcompanies,
theydosignalthatregionalconsumersmayslowlybutsteadilyre-
placeoilimportswithdomesticgasresources.
ijems

GasDiscoveriesinCyprus
[25]
figure1
TotalOutward
DirectInvestments
ofRussiaandthe
shareofCyprusand
Germany,
2009–2021(adapted
fromCentralBank
ofRussia2021)
figure2
TotalInwardDirect
Investmentsin
Russiaandtheshare
ofCyprusand
Germany,
2009–2021(adapted
fromCentralBank
ofRussia2021)
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PéterKacziba
Duetothesedevelopments,Russiandecision-makershavebeen
presentedwithtwostrategicchoicesregardinggasdiscoveriesin
Cyprus.ThefirstisthatMoscowgainsinfluenceintheGreekCypriot
gasindustry,therebyobtainingfurthereconomicandpoliticalcap-
italintherocbutconfrontingAnkara’sinterestsandriskingposi-
tionsinTurkey.ThesecondisthatRussiatriestomaintainitseco-
nomicandpoliticalpositionsinCyprusbutdistancesitselffrom
thegasdevelopments,thuskeepingAnkarapleasedbyaccepting
lossesintheGreekCypriotenergysector.Intermsofforeignpol-
icychoices,Russianleadersselectedthesecondoption,prioritising
regionalenergyandstrategicinterestsoverpotentialpowermax-
imisationinCyprus.
foreignpolicyoutcomesanddiscussion
Thesystemicandunit-levelvariablesoutlinedabovehavedeter-
minedforeignpolicyoutcomesanddefinedRussiandecisionsover
GreekCypriotgasopportunities.Thesesystemicandinternalfea-
turescontouredaparticularlycomplexsituationinwhichRussia’s
globalandregionalinterests,aswellastheconcernsofcertainunit-
levelfactors,limitedMoscow’sabilitytoengageinthegasdevelop-
mentsofCyprus.Table5brieflysummarisesthesedevelopments
andoutlinessomeofthemainRussian-relatedactivitiesthathave
takenplacesincethediscoveryofgasinCyprus.
Thetable5revealsthatRussiawasseekingtogainmorepromi-
nentgaspositionsmainlybefore2014.Duringthisperiod,Novatek
andRosneftshowedgreaterinterests,althoughneithermanaged
totakepositions.Thelong-termabsenceofstate-ownedGazprom
iscertainlyindicative,asistheTurkishwarningtoexpelallen-
ergycompaniesinvolvedintheexplorationsinthedisputedeez
ofCyprus.Gazprom’sattemptstoobtainadrillinglicensein2013
isanotableexceptionandanindicationofshort-termresponses
torapidlyemergingopportunitiesofferedbythefinancialcrisisof
roc.Theseattempts,however,cannotberegardedaslong-term
strategicgoals.Onthecontrary,Gazpromremaineddistantfrom
theGreekCypriotgasdevelopmentsinthelong-termandallowed
otherRussiancompaniestoparticipateintheupcominglicenc-
ijems

GasDiscoveriesinCyprus
[27]
table5 KeyEventsLinkedtoRussiaintheGasDevelopmentsofCyprus
Event Year
Cypruscompletesitsfirstlicencinground–noRussianbid 
RussiannavynearsgasdrillingzoneintheCypruseez 
DiscoveryofAphroditegasfieldbyNobelEnergyinBlock 
PresidentChristofiasexpressedhopesthatRussiancompanieswould
participateinthesecondlicensingroundofCyprus

TurkeywarnsitwillshunfirmsinvolvedinCyprusoilandgasdrillings 
Cypruscompletesitssecondlicencinground:Nicosiadecidedtoaward
ConsortiumledbyTotal,NovatekandgpbGlobalResourcesforthe
Block

TheGreekCypriotgovernmentannounceditsdecisiontoendtalks
withtheFrench-RussianconsortiumoverlicencingrightsofBlock,
choosinginsteadtostartnegotiationswitheni-kogas

GreekCypriotParliamentarydelegationarrivedinMoscow:Russia
claimsithasastrategicinterestintheenergydevelopmentsofEastern
Mediterranean

IteraownedbyRosneftattemptstonegotiatewithCyprusPublicGas
Companytosupplygasforelectricityproduction;negotiationsfail

GazpromproposedtoundertakethefinancialrestructuringofCyprus
banksinexchangeforexplorationrights

Cyprus’thirdlicensing-roundforblocks,and–noRussianbid 
DiscoveryofCalypsogasfieldbyeniinBlock 
RussiawarnsCyprusagainstallowingusmilitarydeploymentonthe
island

DiscoveryofGlaucusgasfieldbyExxonMobilandQatarPetroleumin
Block

ThreeconsortiarunningforCypruslngterminalconstruction–no
Russianbid

NovatekbidforsupplyinglngtoCyprus 
EniandTotalhavepostponedexploratorydrillinginCyprusdueto
covid-

AnastasiadescallsPutintohelpeasegassearchtensionswithTurkey 
notes BasedonthearchivesofReuters,HürriyetandCyprusMail.
ingrounds.ThisbehaviourdemonstratesthatRussiawaspursuing
mixedstrategiesuntil2014,andwhileGazprom’sabsenceattempted
toappeaseAnkara,Moscowstillsoughttomaximiseitspowerpo-
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[28]
PéterKacziba
tentialthroughothercompanies.Duringthisperiod,Russiafol-
lowedthesametacticsinCyprusasinotherstatesintheregionand
triedtoobtainexplorationanddrillingrights.
Whilebefore2014RussiawastryingtotakeitssharefromCypriot
gasdeposits,after2014itabandoneditsbalancingstrategy.From
thisperiodonwards,Moscowdistanceditselffromallmajoroppor-
tunitiesandconcentratedonconsolidatingitsdominantroleinthe
economicsector.ItisimportanttonotethatRussiaatthesame
timeremainedactiveinotherregionaltheatres:Rosneftsecureda
30stakeofEgyptianZohrgasfieldinDecember2016;Total,Eni
andNovatekconsortiumobtainedtwoLebaneselicensesinDecem-
ber2017;whileinthesameyearDamascusgrantedexclusiveexplo-
rationandproductionrightsforRussia.Perhapsmoreimportantly
GazpromhasreceivedAnkara’spermissiontoconstructTurkStream
Line1in2016andLine2in2018(Pinchuk2016;Geropoulos2018).
TheseactivitiesindicatethattheRussianstrategyofgainingen-
ergypositionsbasedonclassicalrealistlogichasonlychangedinthe
caseofCyprus.Accordingtothefindingsofthepresentstudy,the
policyshiftmayhaveoccurredduetothefollowingreasons:
•From2014onwards,thedeterioratingRussian-eurelations
andtheuncertainfateofNordStream2havemadethecon-
structionofTurkStreamincreasinglyimportantforRussia.
Forthisreason,MoscowwasreluctanttoopposeAnkara’sam-
bitionsinCyprusanddeliberatelydistanceditselffromthe
otherwiselow-profitGreekCypriotgasopportunities.
•Russiahasbeenconsideringitsnationalandcorporateenergy
interestsandhasnotintendedtoassistandsupporttheemer-
genceofpotentialcompetitorswitheumembership.
•Consequently,Russiadidnotprotestexcessivelywhenits
companieswereside-linedinlicensingtendersand,despite
itsheavypoliticalandeconomicpresenceontheisland,ithas
notclashedwiththeeumemberroctofurtherRussiangas
interests.
Thesefindingsenablethestudytotestthehypothesis,whichar-
guedthattheabsenceofRussianinvolvementintheGreekCypriot
ijems

GasDiscoveriesinCyprus
[29]
gasdevelopmentshasnotonlybeencausedbysystemicobstacles,
butalsobytheinterestsofdomesticvariables.Moreprecisely,the
hypothesisarguedthat systemic and domestic variables both con-
strained the otherwise predictable Russian involvement in the Greek
Cypriotgasaffairs,thusforcingnationalstakeholderstostayawayfrom
seeminglybeneficialopportunities.TheanalysishasshownthatRus-
sia’sstrategicchoicetolimititsroleintheGreekCypriotgassec-
torwasindeedinfluencedbybothsystemicandunit-levelfactors.
Atthesystemiclevel,theadvancementofRussiangasinterestsin
CyprushasbeenconstrainedbyvariablesofRussian-eu,Russian-
us,Russian-TurkishandTurkish-GreekCypriotrelations,forming
asensitivegeopoliticalsituationinwhichMoscowhadtochoose
betweenitssystemicandCypriotinterests.Thesesystemiccon-
straintswerecompoundedbydomesticvariables.Theattitudeof
the strategiccultureprovedtobeacornerstoneinthisrespect,asit
pragmaticallysubordinatedRussianinterestsinCyprustothosein
Turkey. Leaderimageshaveamplifiedthesetendenciesanddefined
CypriotgasopportunitiesalongwithRussianinterpretationsofthe
balanceofpower.SuchinterpretationsseemedtoconsiderRussian
positionsintheGreekCypriotfinancialsectorsasMoscow’sspheres
ofinterest,whiletheyalsoappearedtorecogniseandrespectrealms
oftheCyprusequilibriumdominatedbyotheractors.Thisbalancing
policy,however,wasnotdrivenbycooperativeattitudes,ratherby
ambitionstoprotecteconomicpositionsinCyprusontheonehand,
andsafeguardregionalinterestsofRussian gascorporationsonthe
other.Thesecorporationswouldhavebeenabletogainimportant
stakesinthegasdevelopmentsofCyprusandthusholdmajoreco-
nomicandpoliticalpositionsinaneumemberstate.Nevertheless,
thepossibilitiesofferedbyTurkeyfaroutweighedthesepotentials
andreducedtherelativevalueofCypriotgasopportunities.Allin
all,theresultsconfirmedargumentsofthehypothesisandproved
theinfluentialimpactsofsystemicanddomesticfactors.Among
these,bothexternalandinternalfactorsplayedimportantparts:
systemiccomponentslaiddownthefoundationsofexternalcondi-
tions,whichwerefilteredbydomesticunitsalongwithmajorstrate-
gicobjectives.Thus,itisworthnotingthattheanalysishasnotonly
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[30]
PéterKacziba
demonstratedtheanalyticalpotentialofneoclassicalrealismbut
alsoshoweditsabilitytoreformthetraditionalrealistarguments
andcomprehendinternationalpoliticsasamaturetheoryofir.
conclusion
Inthepastdecade,severalnewgeopoliticalfactorshaveemergedin
theEasternMediterranean.Amongthese,gasdiscoveriesarepartic-
ularlyimportantbecausetheycanbothbenefitandharmregional
andglobalactors.Theycanbenefitifnationalenergyconsumption
issupplementedwithlocalgasresources,exportsgeneratefinan-
cialsurpluses,andgovernmentsexploitdiscoveriesasgeopolitical
gains.Nonetheless,theycanalsocauseharmifbenefitsandprof-
itsarenotdistributedamongregionalactorsandutilizedonlyby
aselectedfew.Duetosuchdichotomies,statesadoptrealiststrate-
giesandapplyrationalchoicemodelstodeterminetheidealbalance
betweendomesticinterestsandpotentialsystemicgainsandrisks.
Russiahasusedsimilartacticstoevaluatethecostsandbene-
fitsofGreekCypriotgasopportunities.Althoughthevaluesofad-
vantagesanddisadvantageshaveshiftedseveraltimesoverthepast
decade,possiblebenefitshaveneverexceededthepotentialcosts.
Moscowhasthereforerefrainedfromimplementingthetraditional
realistlogicinCyprusandconcentrateditspowermaximisationef-
fortsonregionalactorsofferinghigherrewards.Theprocess,how-
ever,wasinfluencednotonlybysystemicfactorsbutalsodomestic
ones:potentialnationalandcorporategainsinCyprushavebeen
constraineddomesticallytosecuremorebeneficialregionalandEu-
ropeanpositions.Thestudy,therefore,provedthesignificantimpact
ofunit-levelvariablesandconfirmedtheneoclassicalrealistposi-
tionarguingthatnationalpowerandsystemicpositionsaretrans-
latedtoforeignpolicyoutcomesthroughthelensesofdomesticfac-
tors(Baylis,Smith,andOwens2008).
Itisimportanttonotethattheexternalanddomesticparam-
etersleadingtothesefindingsarefarfrombeingstatic.Conse-
quently,Russia’sprioritiesmaychangeasnewgeopoliticalfactors
emerge,forcingMoscowandNicosiatodevelopcloserenergyties.
Possiblegeopoliticaldevelopmentssuchasthediscoveryofnewgas
ijems

GasDiscoveriesinCyprus
[31]
reserves,thedeteriorationofRussian-Turkishrelationsorthecom-
missioningoftheEastMedgaspipelinewouldcertainlytransform
thecomponentsofregionalequilibriumandraiseMoscow’sinter-
eststorebalancebygainingstakesintheGreekCypriotgassector.
Tounderstandandinterpretthesedevelopments,futureresearch
needstopaymoreattentiontoRussia’srole,asMoscowhasnot
onlyreturnedtotheregioninrecentyearsbuthasbecomeaninte-
gralpartofEasternMediterraneanaffairs.
fundingstatement
Supportedbyefop-3.6.3-vekop-16-2017-00007:YoungResearchersfrom
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