Turkey Pushes Panic Buttonby by blocking further Cypriot Offshore Drillings

Since the beginning of offshore exploration in the Cypriot exclusive economic zone (EEZ) a decade ago, the actions taken by Turkey show that it is determined to either control or stop exploration and exploitation of hydrocarbon resources in the Cyprus offshore. Usually Turkey’s actions consist of ordering seismic survey vessels out of the area, monitoring drilling activities and warning companies not to engage in exploratory activity in areas where Turkey claims to have an interest or that it actually claims as its own territory. Turkey in the past has sent seismic vessels of its own into the waters south of Cyprus, clearly within what is internationally recognized as the EEZ of the Cyprus Republic.

Routinely the Cypriot government will file complaints with international bodies and seek diplomatic intervention. Subsequently Turkey will receive polite reprimands that it ignores and Cyprus will get expressions of support from the European Union and the US concerning its right to explore its own waters. Nothing changes.

The events of the last few weeks are the starkest example of the stance that Turkey has taken to interfere in East Mediterranean energy exploration. Knowing that drilling was scheduled, Ankara issued a navigation advisory (Navtex) to international shipping, warning that naval exercises would be taking place in a large area of the East Mediterranean southeast of Cyprus. As it approached its targeted drill site in Cyprus Block 3, licensed to Italy’s Eni and South Korea’s Kogas in 2013, the Saipem 12000 drillship was encircled and halted by Turkish warships.

The encirclement and threats made against the drillship demonstrates Turkey’s desperation to prevent the Republic of Cyprus, the internationally recognized government of the island and a member of the European Union, from discovering and producing natural gas for sale on the international market.

The Saipem 12000 was fresh from a discovery in Cyprus Block 6, which is licensed to Eni and France’s Total, when it neared the Block 3 well location. At the Calypso well in Block 6, which is southwest of the island and close to an area west of Cyprus that Turkey claims as part of the its continental shelf, Eni and Total discovered gas with a resource estimate of 8 trillion cubic feet (226 billion cubic meters) or more.

Until now, Turkey has no significant resources of oil or natural gas of its own and must depend on importing almost all of its hydrocarbons. Most of its gas imports of approximately 45 bcm/year come from Russia, followed by Iran and Azerbaijan. Turkey has recently embarked on expanding its LNG import capacity.

But with open access to the East Mediterranean, Turkey would stand the chance of having gas resources that it could claim as its own through the Turkish-Cypriot administration in northern Cyprus. To this end, Turkey claims rights to all of the Cyprus offshore that lies north, east and southeast of the island through a 2011 agreement made with the Turkish-Cypriot administration, which identifies itself as the Turkish Republic of Northern Cyprus (TRNC), and which, like Ankara, realizes the seriousness and overall implications of commercial gas quantities offshore Cyprus accumulating before the island can reach a political settlement, even though the Cypriot government has stated repeatedly that all benefits will be shared fairly among all Cypriot citizens.

The Turkey-Turkish Cypriot agreement awarded licenses for the offshore areas claimed by the Turkish-Cypriots to Turkish Petroleum (TPAO) regardless of the fact that TPAO lacks the equipment and expertise to carry out offshore exploration without foreign contractors. The deal was made specifically to challenge possession of an area well south of the island and delineated into blocks by Nicosia that were being offered in international licensing rounds.

It is important to note that even if the so-called TRNC was an independent, internationally-recognized state, operating within the limits of international law, the offshore territory that it (and Turkey) claims the right to would be well outside an EEZ administrated by the Turkish Cypriots.

Between the area claimed by the Turkish-Cypriots and the area to the west that Turkey claims as its continental shelf, the Republic of Cyprus is left with an offshore corridor running south of the island to Blocks 10, 11 and part of 12. Furthermore, earlier this year Turkey informed Egypt that it did not recognized the maritime border between Cairo and Nicosia, so its appears that the plan is to squeeze the Republic of Cyprus out of the scenario altogether.

For its part, Cairo responded with a warning of its own to Ankara to respect Egypt’s international accords.

Ankara’s argument, and that of the Turkish-Cypriot administration, is that the Greek-Cypriots have no right to negotiate contracts for, explore or exploit hydrocarbons found in the island’s EEZ before a settlement and without the participation of Turkish Cypriots, and it must therefore stop until a solution is found for the 44-year-old Cyprus problem. The latest round of talks between the two sides collapsed late last year after Turkey insisted that it continue to be a guarantor of the agreement giving it the right to intervene in the unlikely event that disputes between Turkish-Cypriots and Greek-Cypriots similar to those prior to 1974 should arise.

Last week, after Turkey had extended the Navtex beyond its original February 22 deadline, the Turkish-Cypriot administration demanded that it too be included in the management and decision-making regarding the island’s natural resources, a situation that prior to a settlement would certainly see Ankara step directly into deciding the course of the island’s offshore hydrocarbon development – which is exactly what it desires.

Speaking in Nicosia last week after the Saipem 12000 had departed for scheduled work offshore Morocco, Cypriot Energy Minister Yiorgos Lakkotrypis told the island’s media that the government would continue with its exploration plan despite the fact that the drillship was prevented from reaching the targeted drill site. The well had been postponed, Lakkoptrypis said, acknowledging that it was not a good development, but that no other planned action was being canceled.

Turkey and the Turkish-Cypriot administration should deal themselves into the future of East Mediterranean energy production by adopting policies that would end the Cyprus problem and generate energy and revenues for all involved.

Each time these events occur, stories appear in the media portending to a gas war in the East Mediterranean. Shooting at drillships will not get Turkey what it wants and such a step would likely backfire by forcing the EU’s long-hesitant hand. Neither community on the island would benefit, Cyprus has a limited defense capability, Turkey would be unable to develop or control any resource seized illegally, and Europe would lose what appears to be a promising new source of energy at a time when global demand for gas is expected to rise in the 2020s and as it looks to pare back imports from Russia.

If there is violence in the East Mediterranean, it will be because the EU, through years of weak diplomacy towards Turkey, allows it to happen.

Author: Gary Lakes