One Cyprus scenario that has received considerable hype is that Gazprom will bail out the country in exchange for rights to develop its offshore gas resources. IMO, this reflects a fundamental misunderstanding of Gazprom’s interests. If anything, Gazprom has an incentive to pay to ensure that Cyprus’s gas reserves are not developed.
That is, Gazprom has every reason to want the gas to remain under the sea. Eastern Med gas would compete with Gazprom’s Russian production: if Gazprom controlled Cyprus’s gas, sales from these fields would cannibalize sales of Russian gas. Meaning that Gazprom has no real interest in developing Cypriot gas-to the contrary.
Obtaining exclusive development rights would give Gazprom the right to not develop, and to prevent anyone else from doing so. This would suit it quite well, and it might be willing to pay something for that right. But as desperate as Cyprus is, it has to realize that giving Gazprom control over its gas destiny would deprive it of the future revenue its resources could generate. It is highly doubtful that Cyprus could negotiate a deal that would effectively compel Gazprom to develop the country’s gas. Therefore, by dealing with Gazprom it would essentially be writing off any prospect of enjoying the benefits of future gas production.
This means that Gazprom’s interests and Cyprus’s are not aligned: the latter wants to maximize the commercial development of its gas fields, the former has no such interest. Cyprus’s horizon might be very short, given its pressing financial needs, but it would have to discount the future extremely heavily to make a deal with Gazprom remotely rational. I consequently deem it very unlikely that Cyprus and Gazprom could reach a mutually beneficial deal.
Development rights to Cyprus’s gas might be valuable collateral for loans that ease the country’s current financial straits. But Cyprus should look energy firms whose interest is to maximize the commercial prospects of its gas resources, rather than Gazprom, which would like nothing better than to sabotage their development.