Europe

Eastern Mediterranean Oil Politics

Ioannis Michaletos
Athens, Greece
June 18, 2007

Cypriot President Tassos Papadopoulos' (right) meeting with French President Jacques Chirac in November laid the groundwork for a defense agreement. (Photo: Jacques Collet / AFP-Getty Images)

Oil drilling rights in the eastern Mediterranean Sea has emerged as an issue over the past few months following an initiative enacted by the Cypriot government to hand out research and drilling rights for oil reservoirs that might be found deep under the sea, and worth some $500 billion.

Cyprus proceeded to cooperate with interested parties of geographical proximity—Egypt and Lebanon—whose exclusive economic zones might also be rich in oil. Further, it seems likely that Israel and Cyprus will form a consensus on how to share the wealth to be found.

Naturally, the developments that unfolded between January and March attracted the attention of Turkey, which hastily made threatening demands against Cyprus. On Jan. 27, the president of the pseudo-state of Northern Cyprus, Mehmet Ali-Talat, stated that there was a chance that unexpected and violent developments could occur due to Cyprus' actions in relation to the oil issue.

On Jan. 30, the Turkish daily Hurriet reported Ankara's demand that the Lebanese and Egyptian governments withdraw their intention to search for oil in an area that Turkey had interests in as well. Moreover, the newspaper noted the willingness of the Turkish administration to react dynamically should its interests not be taken into account.

Further statements issued by Ankara and Nicosia resulted in the circumnavigation of Cyprus by the Turkish Navy in a "Tour de force" in early February. By that time, the overall situation had resulted in a multitude press releases and op-eds in Turkey, Cyprus, and Greece commenting on the possibility of a conflict over oil.

On March 6, American ambassador to Cyprus Ronald Schlicher addressed the public in Cyprus via the CNN Turk TV station and expressed the opinion that it is Cyprus' solemn right to decide if it wishes to exploit oil that is found in its territorial or exclusive economic zone. This was a clear indication that the United States is very interested in securing influence in Cyprus in order to gain contracts for the extraction of oil.

Despite Turkish opposition, Cyprus has already begun the process of initiating a bidding procedure for the oil fields. The first tests will occur in 11 areas off southern Cyprus. The total surface area is around 70,000 square kilometers. French consultants employed by the Cypriot government have stated that at depths in excess of 3,000 meters there is a high probability of discovering natural gas fields as well.

Cyprus has already stated that it will issue three types of permits in relation to the oil fields. The first permit will be for one-year long tests, the second for three years, and the third a 25-year development license by which the companies will be able to produce and process oil and gas. As part of its marketing endeavors, from now until mid-July (when the first permits are set to be issued), the Cypriot government plans to organize trips to the major oil capitals of the world in order to promote the new riches of the island to prospective investors.

These recent developments are also related to previous Turkish-Israeli initiatives that started back in 2001 when the Geophysical Institute of Israel, an Israeli research team, and the TRAO Co. (Turkish petroleum) made explorations in the Alexandretta Gulf close to the Turkey-Syria border. The head of the Israeli group, Ephraim Levi, stated in the Turkish press that there were large amounts of gas as well in the wider area and that the results from the initial research were positive and satisfactory.

Over the past few years, the cooling down of Turkish-Israeli relations has put a hold on their joint exploration project, although it hasn't been abandoned. The newest upc on energy relations between the two states was Israeli Prime Minister Ehud Olmert's visit to Ankara in late February to discuss the plan of constructing a sub-water oil pipeline from Turkey's Ceyhan port to Israel's Ashkelon port.

It is important to note that Ceyhan is a major oil terminal for the eastern Mediterranean region and the Baku-Ceyhan pipeline transferring oil from Azerbaijan ends there. Therefore, oil politics in this periphery region is related to the wider geoeconomic structure as it has been formed since the end of the Cold War and, of course, attracts the interest of all global powers and energy-related entities.

Another notable development is the agreement reached between Libya and Turkey in late 2004 on the exploitation of probable oil basins off the coast of Libya. The estimated investment by Turkish companies was estimated at $2 billion, albeit there is no current information on whether the research findings were satisfactory to proceed with commercial exploitation.

For the time being, the issue of Cypriot oil is gathering importance and interested parties are trying to place themselves in a position of advantage. Large oil companies from the United States, Russia, Britain, China, Norway, France, and Germany seem to be interested in investing for Cyprus' assumed offshore hydrocarbon reservoirs.

The importance of energy has affects the culmination of various diplomatic and geopolitical schemes. The American administration that traditionally gravitates toward a pro-Turkish stance in the perennial Cypriot issue has moved a bit toward addressing the sensitivities of Cyprus and the relations between the two states can be considered excellent for the time being. The American ambassador to Cyprus said in April that his country continues to value Cyprus as a close partner in the joint effort to combat terrorism, the proliferation of weapons of mass destruction and organized crime.

Addressing a ceremony for the donation of an underwater camera by the American Embassy and the United States Customs Service to Cyprus' Marine Police, Schlicher said that he was pleased "the U.S. and Cyprus continue to work closely together in many areas and that our cooperation with Cypriot law enforcement agencies continues to be excellent."

The ambassador also said: "We continue to value Cyprus as a close partner in our joint struggles against terrorism, against proliferation and against organized crime and we look forward to further joining efforts to help increase the safety and welfare of the citizens of both our nations."

A development worth mentioning is France's dynamic involvement in Cyprus and the wider Mediterranean region. Cyprus and France recently signed a defense agreement in a bid to strengthen bilateral relations. The agreement was signed at the Ministry of Foreign Affairs in Nicosia by Cypriot Minister of Foreign Affairs Yiorgos Lillikas and French Minister of Defense Michele Alliot-Marie.

In statements after the signing ceremony, Lillikas expressed his satisfaction and noted that it is a natural development of everything that was agreed during President Tassos Papadopoulos' meeting with President Jacques Chirac in November.

"France and Cyprus have always had excellent political relations, they have and share a common vision on international issues and now as EU partners have shown that with their approach they can contribute to peace in the Middle East," Lillikas added.

"The crisis in Lebanon gave both countries the chance to cooperate in the military field with benefits not only for both countries but mainly for Middle East countries. I wish and hope that just as Cyprus proved to be a factor of stability in the Middle East region, the solution to the Cyprus problem and Cyprus' reunification will prove that Cyprus can, reunited, with the cooperation of all partners such as France, help in peace and stability in the region," he said.

Alliot-Marie said that it was an agreement that strengthens relations between the two ministries, and added: "It provides for greater exchange in training issues, on the level of joint maneuvers, when analyzing the geostrategic situation. It is a continuation of the existing relations."

Both states now train jointly regularly and French Special Operations Forces are backing UN forces in Lebanon through the use of Cypriot bases. Recent information that surfaced in a Greek defense journal revealed that a Cypriot unit will participate in a military parade on July 14 in Paris—the first time an EU army corps has been invited for the French national holiday, a sure indication of the progress relations between these two countries have made.

Cyprus has upgraded its political, economic, and military value and apart from the three forces of the 1959 Zurich treaty (Greece, Turkey, and Britain), the United States, France, and Russia as well as the surrounding Middle Eastern states are entangled in regional political developments that among other things include energy security.

Cyprus is a well-developed state and a recent report published by the European Commission last month describes its future economic prospects as "excellent." The production of hydrocarbon will further empower this island of 800,000 to become the regional hub of southeastern Europe, the Eastern Mediterranean, the Black Sea, and the Middle East, thus reaching out to a market of around one billion people.

The delicate geopolitical balances, however, should be made note of since the turbulent recent history of the region has produced conflicts and quagmires mostly related to the control of energy routes and supplies. The aspirations of some of the strongest global interest groups will dictate the fate of the eastern Mediterranean centered on Cyprus based on the "black gold" beneath its surface.




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