Cyprus should serve as the number one choice and an important gateway for Russian businesses into the European market, Minister of Energy, Commerce, Industry and Tourism, Yiorgos Lakkotrypis has said, adding that the Government remains committed to achieving this goal.

Lakkotrypis` remarks, made during an address at the two-day conference titled “2013 Global Russia Business Meeting”, came a few weeks after a decision by the Euro area Finance Ministers on a €10 billion financial assistance package to Cyprus which provides up to 60% haircut on deposits in Cyprus` largest lender, the Bank of Cyprus, and the winding down of the island`s second largest Bank, Cyprus Popular Bank, which means that its uninsured depositors (above €100,000) may take losses up to 80%.

As a result of the changes imposed mainly from the immediate downsizing of the island banking sector to 350% of GDP compared with 550% last year, a European Commission document projects a sharp contraction of 8.9% of GDP in 2013, for the island`s economy.

“Undoubtedly, Cyprus will now have to go through a very difficult and long transition period, following the recent agreement of the Memorandum with Troika, the provision of a €10 billion financial assistance to the Cyprus Government and the full operation and restructuring of the Bank of Cyprus,” Lakkotrypis said, adding that “the Cyprus government is already taking the necessary measures to overcome these difficulties and to maintain and strengthen the relationship between Cyprus and Russia.”

According to Lakkytrypis, one of the government`s main priorities is to expand further the cooperation with Russia and Russian businesses, mainly building on the fact that Cyprus still provides an excellent platform for conducting and managing business activities from Russia to Europe and vice versa.

“We are in fact confident that Cyprus has all the advantages and resources to put together a successful future, based on a new economic development model. This will be led by a strong private sector, which will act as a catalyst of economic activity and will be fully supported by the public sector and the Government,” he went on to say.

Furthermore, Lakkotrypis added that Cyprus also maintains its competitive advantages regarding its stable legal and regulatory framework and tax incentives.

The Minister said that Cyprus will build its economic model “around oil and gas business.”

Exploratory drilling in block 12 in Cyprus` Exclusive Economic Zone conducted by Huston-based Noble Energy has revealed a natural gas reserve of 5 to eight trillion cubic (tcf) feet with a gross mean of 7 tcf. The US company is expected to proceed with an appraisal well in June 2013. During a second licensing round conducted in late 2012 and early this year, the Cypriot government granted exploration licenses to consortium ENI/KOGAS for blocks 2, 3 and 9 and with French giant TOTAL on blocks 10 and 11.

“Given the discovery of significant reserves of natural gas in Cyprus’ Exclusive Economic Zone, which have created new prospects for our country and have placed us on the European and global energy maps, our plan is for this new economic model to be built around the oil and gas business,” he said.

Lakkotrypis went on to say that “the benefits from natural gas extraction will prove to be catalytic for the economy of Cyprus and can help transform the region into an area of sustainable and balanced economic development.”

“There is no doubt that all these can spark the further development of relations between Cyprus and Russia,” he concluded.

The meeting concludes later today with a farewell dinner, to be addressed by Foreign Minister Ioannis Kasoulides.