High stakes in gas standoff between Cyprus, Turkey

Turkish police officers patrol next to the drilling ship ‘Yavuz’ scheduled to search for oil and gas off Cyprus, at the port of Dilovasi, outside Istanbul. (AFP)
Updated 21 July 2019

High stakes in gas standoff between Cyprus, Turkey

  • Turkey vowed to escalate its activities in waters around the island
  • Turkey will not back off unless the EU and the US apply serious sanctions that hurt its economy

NICOSIA: Longtime adversaries Cyprus and Turkey are locked in a tense “game of chicken” over the prospect of a multibillion-dollar Mediterranean gas bonanza with neither side willing to capitulate, analysts say.

Turkey vowed to escalate its activities in waters around the island after the EU on Monday agreed on measures to punish Ankara for pursuing “illegal” drilling in Cyprus’s exclusive economic zone.

“This is a tit-for-tat game where nobody is ready to back down, with Turkey willing to go one step further,” Hubert Faustmann, professor of history and political science at the University of Nicosia, told AFP.

Turkey “will continue to drill, they may even decide to drill in blocks licensed by the Cypriot government ... it’s a game of chicken,” he added.

The discovery of huge gas reserves in the eastern Mediterranean has stoked long-standing tensions between EU member Cyprus and Turkey.

The island is divided between the internationally recognized Republic of Cyprus and a breakaway state set up after a Turkish invasion launched on July 20, 1974 in response to a coup sponsored by the military junta then ruling Greece.

Turkey, the only country to recognize the Turkish Republic of Northern Cyprus, has sent three ships to carry out drilling off the Cypriot coast despite EU condemnation and strong words from Washington.

In response EU foreign ministers agreed measures including cutting €145.8 million ($164 million) in pre-accession funds to Turkey allocated for 2020.

Turkey, which does not recognize Cyprus as a sovereign or EU member state, says its actions abide by international law and that it is drilling inside its continental shelf.

While negotiations to reunify the island remain on hold, Cyprus has moved to start gas and oil exploration by issuing licenses to international companies.

That has angered Ankara which argues that such exploration deprives the Turkish Cypriot minority of benefiting from the island’s natural wealth.

“Turkey won’t step down and EU sanctions are mild, the sanctions are not painful, and Turkey knows there is no determination for a confrontation,” said Faustmann.

He argued that Cyprus needs to find more gas to make it commercially viable to extract.

“Unless there’s a big find, it might be a lot of noise over nothing, there isn’t enough extractable gas at the moment.”

Experts also argue that if the escalation continues it will be difficult for energy companies to explore off Cyprus due to the risk.

“Interest in operations is there, however tensions with Turkey are not helping. If tensions subside then there will be a lot of interest because there is support from the markets and the EU too,” said energy analyst Cyril Widdershoven, founder of the consultancy firm Verocy.

Cyprus on Tuesday rejected as “unacceptable” a Turkish Cypriot proposal on energy revenue sharing to help de-escalate tensions.

Nicosia argues that jointly managing the island’s untapped energy resources can only be workable once an elusive peace settlement has been agreed, while assuring Turkish Cypriots will get their equal share.

Atlantic Council senior associate Charles Ellinas said the rising tensions will make the waters choppier for energy companies when they resume drilling in blocks licensed by the Cyprus government, especially in areas disputed by Turkey.

“Turkey will not back off unless the EU and the US apply serious sanctions that hurt its economy. But I do not see that happening... NATO, trade and refugees are important to them,” he told AFP.

“Turkey will maintain aggression until Cyprus agrees to put hydrocarbons on the negotiating table.”

The waters off Cyprus have attracted international giants such as ExxonMobil of the United States, France’s Total and Italy’s Eni.

Sizeable natural gas deposits have been discovered in three areas but have yet to be extracted.

Last month Cyprus said it expected to earn $9.3 billion over 18 years from exploiting a gas field in the Aphrodite block under a renegotiated contract with Royal Dutch Shell, US-based Noble and Israel’s Delek.

In February US energy giant ExxonMobil announced the discovery of a huge natural gas reserve off the island’s coast which Cyprus hailed as one of the biggest worldwide in recent years.

Ellinas estimates Cyprus’s discovered reserves so far are around 10 trillion cubic feet and “there is probably as much still to be discovered and possibly more.”

He estimates total gas revenue could be about $160 billion, which could generate profits of $30 billion over 20 years, but finding buyers may be tough in a competitive international market.

“Cyprus’s share could be $17 billion. But first, sales need to be secured, and there lies the challenge, in a market inexorably moving toward renewables and clean energy. The longer it takes the more difficult it becomes.”

Dick Cheney: Upcoming decade bleak if US adopts ‘disengagement’ policy

Updated 15 min 5 sec ago

Dick Cheney: Upcoming decade bleak if US adopts ‘disengagement’ policy

  • Former US vice president sounds warning during panel discussion on ‘The global order 2030’
  • Remarks seen as indirect criticism of President Trump’s pledge to pull forces out of Syria

DUBAI: Dick Cheney, one of the most influential vice presidents in US history, has warned that “American disengagement” from the Middle East would only benefit Iran and Russia.

The 78-year-old politician’s warning came during a speech at the Arab Strategy Forum (ASF) in Dubai, an annual event in which the world’s leading decision-makers address global challenges and opportunities in “a precise, balanced and politically scientific manner.”

Cheney’s remarks could be seen as indirect criticism of US President Donald Trump’s pledges to pull forces out of northern Syria.

Addressing conference delegates, he cited the withdrawal of US troops from Syria and the 2015 lifting of sanctions against Iran during Barack Obama’s presidency, as events that amplified instability in the region.

“Our allies were left abandoned, and no one wants to feel that way again,” said Cheney, who was chief executive of Halliburton between 1995 and 2000 and held high posts in several Republican administrations.

The former VP’s remarks came during the forum’s concluding session titled, “The global order 2030: The Unites States and China,” which was attended by Dubai’s ruler Sheikh Mohammed bin Rashid Al-Maktoum.

Joined by Li Zhaoxing, a former Chinese foreign minister, in a candid panel discussion, Cheney offered his views on the world order in the next decade within the context of Iran’s regional ascendancy, China’s rise and Russian ambitions in the Middle East.

“I am not here to speak on behalf of the US government, or to speak to it,” Cheney said, adding that his talking points reflected concerns he suspected everyone shared.

“For decades, there’s been a consensus of America’s influence in the world and how to use it,” he said, citing instances where US disengagement had caused the political situation in the Middle East to implode.

“Humanity has benefited from America’s protectionism of the world and its relationship with its allies in the region.”

According to him, the upcoming decade would be bleak should the US adopt a disengagement policy, with the pressures most felt by supporters and partners in the Middle East.

Turning to the role that the US and China would play in the global status quo by 2030, Cheney said there were still concerns over China’s reputation.

“We had hoped that there would be a political evolution in China, but that hasn’t happened yet,” he added.

Li said: “China will never learn from a world superpower and will never try to be hegemonic,” citing as examples China’s strong relations with the UAE and the wider Arab world, and the impact of the Belt and Road Initiative (a global development strategy) on Chinese foreign policy.

“History is the best teacher, but the US has forgotten its own history. You don’t keep your promises,” added Li, directing his statement at Cheney.

Cheney said that since the end of the Cold War, the US had expected that its policy toward China would have had a beneficial effect on its behavior and helped to deepen bilateral relations.

“It was disappointing to see that these expectations were not borne out – China has only grown richer, the regime has become more oppressive, and instead of evolving, it became more assertive,” he said.

In a separate ASF meeting at the Ritz-Carlton, Dubai International Financial Center, Karim Sadjadpour, senior fellow at the Carnegie Endowment for International Peace think tank, discussed Iran’s policies in a session titled, “The race for relevance and influence in the region: GCC, Iran, Turkey and Russia.”

Sadjadpour said he expected in the next 10 years to see the arrival of “an Iranian Putin” with a military background as the country’s next leader.

“After 40 years of a clerical regime and a military autocracy, there is now a rise of Persian nationalism. This is a shift from the sheer revolution ideology,” he said.

Sadjadpour said there had been an evolution of “Shiite Arab” identity during the past two decades, with the focus more on religion than nationality.

Under the circumstances, he noted that Sunni Arab powers had an important role to play in welcoming Shiite Arabs into their fold “and luring them away from Iran.”

The analyst added that the future of the Arab world could not be explored and forecast without considering a growing mental health crisis. “Today, hundreds of millions of people in the region suffer from PTSD (post-traumatic stress disorder), and the effects of this will be with us for decades to come, resulting in issues like radicalism.”

He said there was a need for training thousands of counselors in the field of mental health in order to reach out to those whose lives had been robbed by extreme violence and conflicts.