By Nuran Erkul
Gas reserves in the Eastern Mediterranean, along with the solution of Cyprus issue, are likely to reduce both Turkey's and the EU's dependence on Russian gas, International Energy Agency (IEA) head said on Friday.
Speaking to Anadolu Agency on the sidelines of World Economic Forum in Davos, Fatih Birol, head of the IEA, stated that the natural gas potential in Eastern Mediterranean is huge and that there could be more reserves which are undiscovered.
"There are two problems at this point. The first is about how to deliver these reserves to the consumer side and the second is that which way to transport the gas would be more economic. We think that delivering the gas through Turkey is going to be one of the less costly ways," Birol pointed out.
The amount of discovered reserves is estimated to be over one trillion cubic meters of gas.
Birol explained that Eastern Mediterranean gas will contribute much to the energy security of the region.
"If a solution is found for Cyprus with the contribution of international organizations, one of the problems about the delivery of gas from the Eastern Mediterranean will be resolved. It will be a very positive step for the energy security of both region and the world," he said.
He also noted that the EU attaches great importance to the natural gas reserves in the Eastern Mediterranean, and it is an option for them to reduce the region's dependence on Russian gas.
"Europe will also reduce its dependence by importing liqufied natural gas (LNG) from the U.S. to Canada as well. We will see these developments in the near future," Birol said.
Birol stressed the importance of Eastern Mediterranean's natural gas for Turkey.
"Turkey's importing and delivering gas from Northern Iraq and the Eastern Mediterranean would be a correct energy and foreign policy," he said.
Birol explained that Iran's plans to increase its daily oil production to 500,000 barrels and China's weakening economy are likely to reduce the oil prices further.
The international benchmark Brent crude oil price has fallen as low as $27 per barrel, its lowest level since 2003. It has been declining since June 2014 when it was $115 per barrel.
Low oil prices reduce investment in the oil industry, Birol said, and that in 2015 investment fell by 20 percent compared with the previous year.
"Investment will decrease 16 percent more. When demand for oil starts to increase in a few years, there might not be production enough to meet this demand. This situation is likely to increase the price of oil per barrel in the long term," Birol stated.
He said that the low oil prices are like a nightmare for Russia and the Middle East.
"According to our research, if oil prices remain near $30 per barrel, it will cost the Russian economy 10 percent of its GDP. For countries in the Middle East, the loss will be equal to 20 percent which is a quite serious problem," Birol concluded.