ENERGY: Cyprus determined to ramp up gas hunt despite Turkish threats

8 mins read

Cyprus said it will “resolutely” continue its energy search for oil and gas despite Turkey firing a hostile warning not to proceed with more drills off the island.

In a rare response, the Cyprus Foreign Ministry issued a statement on Friday slamming Turkey for showing “utter disregard for conventional and customary international law and its disrespect for the sovereign rights of the Republic”.

Turkey on Thursday strongly warned Cyprus not to go ahead with exploiting block 7 after licenses were issued to a consortium of France’s Total and Italy’s Eni.

Nicosia said the presence of France’s Total and Italy’s Eni “constitute an undeniable vote of confidence” in Cyprus’ energy strategy amid Turkish aggression.

“Turkey deliberately fails, once again, to comply with international law, by making groundless claims and disregarding the position of the international community in full support of Cyprus’ sovereign rights,”. 

Turkish Foreign Ministry Spokesman Hami Aksoy claimed block 7 overlaps a section of Turkey's continental shelf.

"Part of the so-called license area Number 7 — as we have repeatedly underlined and shared with the international community — remains within the continental shelf of our country, which is also registered with the United Nations," Aksoy said.

“Turkey will in no way allow any foreign country, company or vessel to engage in unauthorized hydrocarbon exploration and exploitation activities within its maritime jurisdiction and take the necessary measures to protect its rights and interests,” he added.

The Atlantic Council’s Charles Ellinas told the Financial Mirror that without a peace deal the dispute over gas in the East Med could hamper Cyprus’ plan to be a gas supplier.

“Turkey is now emboldened and is implementing its plans, supporting its claims in the East Med,” said Ellinas.

In a presentation earlier this week, Ellinas said the emphasis should be placed on resolving problems, thus unlocking regional gas market potential. 

“If this becomes understood by East Med countries, including Cyprus and Turkey, it could defuse the impact hydrocarbons have on regional geopolitics.”

Biggest players

Nicosia on Wednesday signed a deal with Total and Eni — the biggest players in Cyprus' energy search — for exploration and drilling off the island’s coast.

Around nine exploration drills are expected over the next 24 months in the various blocks off the southern coast.

Aksoy said the deal with Total and Eni "shows that despite all our warnings, the Greek Cypriot Administration (Cyprus) is not able to realize our commitment to this issue."

"This signature proves the Greek Cypriot Administration insists on maintaining the irresponsible attitude that disregards the equal, inseparable rights and interests of Turkish Cypriots to the natural resources in and around the island.”

Turkey opposes Cyprus’ energy quest without the participation of Turkish Cypriots but does not recognise the Republic or its EEZ, claiming large swathes of it such as blocks 1, 4, 5, 6 and 7.

Nicosia made clear that block 7 lies within the EEZ/continental shelf of Cyprus, “in a marine area already delimited with Egypt in 2003, in accordance with international law”.

“The exploration and/or exploitation of Block 7 is an exclusive sovereign right of Cyprus and does not affect the rights of any third state, including Turkey,” said the Cyprus foreign ministry. 

“A country’s natural wealth belongs to the state and the responsibility for managing it lies with its government for the benefit of all its citizens.”

Ankara sent two drillships — Fatih and the Yavuz — into Cyprus waters several months ago, those vessels left the area this week.

Total and Eni hold exploration licenses for seven of the 13 blocks. Korea’s Kogas is also a partner in three of those concessions.

Last year, Cyprus invited Total and Eni to bid for unclaimed block 7 of its Exclusive Economic Zone (EEZ) and on Wednesday contracts were signed giving them an equal 50 per cent share in the venture.

Cypriot Energy Minister George Lakkotrypis called it an “important development” as it widens the presence of international companies in Cyprus’ EEZ while strengthening the government’s strategic partnership.

Around nine exploration drills are expected over the next 24 months in the various blocks off Cyprus’ southern shore.

Nicosia decided to proceed with exploiting block 7 after a preliminary gas discovery in adjacent block 6 is thought to extend into it, said Lakkotrypis.

Eni is the operator of Block 6 with a 50% participation interest and Total has the other 50%.

The Calypso field is considered by Eni to be a promising gas discovery that confirms the extension of “Zohr like” play in the Cyprus blocks.

The discovery of nearby Egypt’s huge Zohr offshore reservoir in 2015 has stoked interest that Cypriot waters hold the same riches.

Turkey is opposed to Nicosia’s energy exploration plans and wants a say in the development of hydrocarbons in the region.

Cyprus has pushed ahead with exploring for offshore energy resources despite the collapse in 2017 at Crans-Montana of talks to end the country's decades-long division.

“After Crans-Montana, Turkey said that everything will change and that’s what it is doing right now, starting with the purchase of drilling rigs, then testing the waters west of Paphos, seeing the lukewarm reaction of the international community, followed by Yavuz south of Karpasia with even less of a response,” said Ellinas.

In May and July, Ankara dispatched two drillships inside Cyprus’ designated EEZ which raised tensions.

Washington and Brussels urged Turkey to withdraw its vessels from Cypriot waters, with the European Union imposing sanctions on Ankara for its confrontation with EU member state Cyprus.

In February, ExxonMobil and Qatar Petroleum made a “world-class discovery” of natural gas quantities of 5 to 8 trillion cubic feet (Tcf) – the biggest find to date.

Texas-based Noble Energy in 2011 made the first discovery off Cyprus in the Aphrodite block estimated to contain around 4.5 trillion cubic feet of gas – it has yet to be commercialised.

Cyprus aims for natural gas to start flowing to Egypt’s LNG facility in 2025 via pipeline from Aphrodite, therefore generating its first revenue from natural gas in the same year.