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Financials

Future revenue from Cypriot gas could aid deal on bailout-Eurogroup head

AMSTERDAM, Feb 7 (Reuters) - Future revenues from natural gas deposits in Cyprus could be taken into account in talks on emergency loans for the Mediterranean island, the head of euro zone finance ministers Jeroen Dijsselbloem said on Thursday.

But he cautioned that before such revenues could be included in calculations for making the country’s debt sustainable, it was necessary to find out more about how much they could total.

“Let’s first wait for some first drillings, and see how much it is, what type of gas it is, what kind of quality before we possibly include it in a programme,” Dijsselbloem told the Dutch Lower House in The Hague.

Money from the gas could be used to service Cypriot debt through a special account, he said.

Euro zone officials have said that currently available estimates for the revenues varied between 100 and 300 percent of Cypriot gross domestic product, which is around 18 billion euros ($24 billion).

“A segregated account is possible, which, for instance, would be used to transfer the gas’ proceeds to,” said Dijsselbloem, making a comparison with Greece where a similar scheme is made for certain funds.

Cyprus, whose banking sector has been badly hurt by the sovereign debt restructuring in Greece, applied for emergency loans from the euro zone last June. Officials estimate the country will need about 17.5 billion euros, almost equal to the island’s GDP. (Reporting By Gilbert Kreijger in The Hague, writing by Jan Strupczewski)

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