Turkey Warns Of ‘New Problems’ In Wake Of Cyprus Licensing Round

Turkey has not taken the news of a successful offshore licensing round for Cyprus easily. Despite international support for Cyprus and its hydrocarbon exploration program, Ankara insists that work south of the island stop and also claims that it already holds the rights to the area. Gary Lakes reports.

The Turkish Foreign Ministry on 18 May issued a statement warning that new problems will arise in the East Mediterranean Sea if exploration in the Cyprus exclusive economic zone (EEZ) continues. The statement was primarily addressed to the international companies that participated in the recently concluded Cyprus offshore licensing round, saying that attempts to explore the region “will definitely lead to new problems.” The statement can also be viewed as another warning from Turkey to the government of Cyprus that Ankara considers itself a party to decisions regarding the development of natural resources in the region. Turkey reiterated its position that the Turkish-Cypriots “have equal and inherent rights over the natural resources located on the whole continental shelf of the island.” Cypriot government officials have stated on a number of occasions that the benefits that may come from developing the island’s hydrocarbon resources will be shared amongst all Cypriots once a settlement for the island’s political problem is found.

Turkey, which does not recognize the Republic of Cyprus, in February issued a statement warning international oil companies not to participate in the Cyprus licensing round, launched on 11 February, calling it an “irresponsible and provocative” act, “taken by the Greek-Cypriots despite all warnings.” The licensing round concluded on 11 May. Some 29 companies, including firms from the EU, US, Canada, Russia and Asia took part. Fifteen applications for licenses were delivered to the Cypriot Ministry of Commerce, Industry and Tourism (MEES, 21 May, 20 February).

The 18 May statement said that unilateral attempts by Cyprus to develop offshore resources “will only lead to tension,” adding that “Turkey will continue to take all measures to protect the Turkish-Cypriots’ rights and interests.” The Turkish Foreign Ministry called for the companies that applied for licenses in the Cypriot bidding round to withdraw their bids and added that the creation of further tension in the East Mediterranean region would be their responsibility. It also said these companies would be barred from participating in any future energy projects in Turkey.

Turkey, which invaded Cyprus in 1974 and which recognizes only the Turkish-Cypriot administration, insists that exploration and development of hydrocarbons in Cypriot waters should not take place until a settlement is found for the 37-year-old ‘Cyprus Problem’ and that a unified state make decisions on hydrocarbon development. Turkey claims that it is protecting the rights of the Turkish-Cypriots, who it maintains are entitled to a fair share of any hydrocarbon resources in the Cypriot offshore. The latest three-year effort by the UN to find a settlement for the long-running political debacle ended in failure earlier this year. One of the problems complicating negotiations is the presence on the island of some 30,000 Turkish troops as well as tens of thousands of Turkish settlers, brought in to occupy Greek-Cypriot properties abandoned when the island was divided into two ethnic zones. The position of the Turkish-Cypriot side is that it wants a separate community (Turkish-Cypriots accounted for 18% of the population in 1974), but an equal say in governing the country, independent from the UK since 1960.

The Republic of Cyprus is the internationally recognized sovereign entity on the island. It is since 2004 a member of the EU and is due to assume the EU Presidency as of 1 July 2012. Cyprus has delimited its maritime borders in accordance with the UN Convention on the Law of the Sea (UNCLOS) with Egypt, Israel and Lebanon (this last accord remains to be ratified by the Lebanese parliament). Turkey recognizes only the self-declared Turkish Republic of Northern Cyprus (TRNC), which declared itself an independent state in 1983 and which is not recognized by any other state except Turkey.

TPAO Licenses South Of Island

The Turkish Foreign Ministry maintains that several Cypriot blocks included in the licensing round overlap with Turkey’s continental shelf. “Turkey, as was already declared before, will not allow any activity over these areas,” the statement said. And it added: “Most of the maritime areas in the south of the island included in this so-called tender overlap with the license areas given to the TPAO [Turkish Petroleum] by TRNC (MEES, 5 December 2011). Any activity of international oil companies in these areas in future would bring them into confrontation with TRNC and TPAO and caused undesired tension. Turkey…acting upon its responsibilities as a motherland and a guarantor power, will give every support to TRNC.”

Upon learning last August that Noble Energy would begin drilling in Block 12 in the autumn, Turkey and the Turkish-Cypriot administration delimited a northern maritime border between the island and the Turkish mainland. The Turkish-Cypriot administration later gave TPAO a license to explore in all Cypriot waters north, east and south of the island, a move that Ankara claims gives it exploration rights to practically all of the Cyprus offshore, including those areas covered in Cyprus’s second licensing round. Furthermore, the Turkish-Cypriot administration gave TPAO a license to drill onshore in the Turkish-controlled area. TPAO spudded its first well – Turkyuduru-1 – near Famagusta in late April (MEES, 7 May).

Also in late April, the Turkish cabinet approved a plan by TPAO to explore in six areas of the East Mediterranean that lie north, east and west of the island, prompting the Cyprus government to respond by saying the areas awarded to TPAO by the Turkish government lie in the Cyprus exclusive economic zone (EEZ). The Cyprus government spokesman said the move by Turkey is “a continuation of her actions which violate international law, and, specifically, the law of the sea.”

Companies Urged To Withdraw Tenders

“It goes without saying that any activity in international oil companies in these areas will definitely lead to new problems,” the Turkish Foreign Ministry said. “Therefore, like TRNC, Turkey also urges the countries concerned and the relevant oil companies to act with common sense and particularly refrain from any activity in these areas which are disputed especially due to the Cyprus issue, and withdraw from the said tender. In spite of our warnings, in case these companies enter into cooperation with [the Republic of Cyprus] in the field of natural gas, ignoring the rights of the Turkish-Cypriots, this will lead to a tension in the region and the responsibility will rest upon these companies.”

Among the major oil companies, only Total and Eni participated in the Cyprus licensing round, but a number of mid-sized firms applied for licenses including Marathon Oil, Petronas and Woodside Petroleum (MEES, 21 May). Total has a large retail operation in Turkey and holds a minor stake in the 1mn b/d capacity Baku-Tbilisi-Ceyhan (BTC) crude oil pipeline. Eni has been party to the proposed Samsun-Ceyhan crude pipeline, but that project has made little progress and there are questions about whether it will proceed. Russia’s Novatek and GazpromBank Global Resources placed bids in the Cyprus round, and while neither is involved with Turkey, Gazprom and Eni are partners in Russia’s South Stream, which may be routed through Turkey’s Black Sea offshore territory. Eni also holds a small share in BTC. 

Israeli Commandos In Cyprus?

An example of the regional media’s willingness to publish sensational reports that exacerbate East Mediterranean energy politics appeared on Turkey’s Anadolou Agency (AA) website on 21 May under the headline: “Israel wants to deploy troops in Cyprus.” Citing an anonymous Greek-Cypriot source who was “close to the February meeting between Israeli Prime Minister Benjamin Netanyahu and Greek-Cypriot administration leader Demetris Christofias,” AA said that Israel wanted to build a $10bn gas pipeline and terminal in Cyprus from which to pump East Mediterranean gas to the European market. The agency said Mr Netanyahu first demanded that 10,000 Israelis be employed to carry out the construction work and then demanded that 20,000 Israeli commandos be stationed on the island to protect the infrastructure, the workers and their families. This “would bring the number of Israelis to come to the port city of Limassol to nearly 50,000,” the news agency reported. Limassol is located on the southern coast of the island. The AA report quoted its Greek-Cypriot source as saying: “Israel wants to come here to stay and never to return.” The report also said the deal between the two leaders included Israeli use of air and naval bases in Cyprus in return to Israel agreeing not to invest in the Turkish-Cypriot area.

During a meeting between President Christofias and Prime Minister Netanyahu in Nicosia in February, talks focused on joint energy cooperation in the East Mediterranean (MEES, 20 February, 23 January). Security issues concerning Cyprus, Israel and offshore exploration have been discussed by both sides, but speculation that Israel would position troops on the island or make use of the few military bases that exist in Cyprus have been dismissed by the Cypriot government as untrue. Israel and Cyprus earlier this year signed two defense and intelligence accords covering cooperation and exchange of classified information.

Responding to the AA report on 21 May, Cypriot government acting spokesman Christos Christofides said the story was  pure fantasy, according to the Cyprus Mail . “It is through such groundless leaks that Ankara seeks to justify its intransigence at the negotiating table, to blast the Cyprus peace talks…and to stoke tensions ahead of Cyprus’s assumption of the EU presidency,” he said. Israel’s Foreign Ministry called the AA report “baseless and disconnected from reality.”

Several days earlier, on 17 May, the Turkish military reported that it had “scrambled” two F-16 fighter jets from its Incilik airbase to chase off an Israeli aircraft that had crossed into northern Cyprus airspace over the sea east of the island. The military said the Turkish Foreign Ministry and the Turkish-Cypriot administration had demanded an explanation from Israel for the violation of airspace. The Turkish media reported that Ankara suspects the Israeli plane was sent into northern Cyprus airspace in order to gather intelligence about Turkey’s oil and gas exploration activities there, according to the UAE daily The National .

Turkey Indicts Israeli Generals Over Mavi Marmari Affair

Relations between Turkey and Israel can only be expected to take a turn for the worse following the issuing of an indictment by Turkey on 23 May against four Israeli generals for their roles in the Mavi Marmara incident in which nine Turks were killed by Israeli commandos who boarded the relief vessel on 31 May 2010 as it attempted to break the Israeli blockade of the Gaza Strip. The Mavi Marmara was one of a number of ships carrying aid and political activists protesting Israeli policies towards Palestinians.

The indictment was prepared by the Istanbul Specially Authorized Prosecutor and has been submitted to the Istanbul Chief Public Prosecutor, who will decide on whether to submit it to a relevant court. The indictment seeks 10 life sentences for four top Israeli generals who Turkey holds responsible for the deaths of the Turkish civilians. An Israeli inquiry into the raid on the flotilla exonerated the Israeli military for any responsibility in the deaths of the civilians on the grounds that the commandos acted in self defense after boarding the ship. Having conducted its own inquiry, Turkey maintains that the blockade against Gaza and the raid on the ships were illegal. Ankara has demanded that Israel apologize for the killings and pay compensation to the victims’ families, something Israel has refused to do. A UN inquiry into the incident acknowledged that Israel used unnecessary force, but that the blockade of Gaza is legal.

© Copyright MEES 2012.