Turkey Flexes Muscle In Eastern Mediterranean Energy Race

Feb 14 2014, 10:23am CST | by

Early this month, Cypriot authorities renounced a naval confrontation between a Turkish vessel and a Norwegian ship that had been commissioned by Nicosia to conduct offshore surveys for energy exploration, alleging that they had been told to “abandon position” and “leave Turkish waters”. The move is the latest in a long line of tense interactions between the two countries over contested access to significant reserves of offshore gas, with Turkey insisting that any such exploration in the region include the Turkish Republic of Northern Cyprus (recognized by only Turkey).

Cyprus currently boasts access to almost half of an estimated 122 tcf of natural gas below waters in the Eastern Mediterranean. According to a U.S. Geological Survey, the country’s ability to exploit the offshore reserves could bring in about $400 billion in revenue over the coming years, not to mention address any domestic needs they might have. Additionally, the site offers a potential 1.7 billion barrels of oil as well.

After sending ships into local waters following Nicosia’s first foray into exploring their offshore potential, Ankara has continued its protests, insisting that any reserves and revenues be split evenly between the Greek and Turkish parts of the country. Further, they announced that any unilateral gas efforts should be considered a “legal transgression” and warned foreign firms against signing on with Cyprus or face repercussions, mostly in the form of restricted access to Turkish energy projects. Still, Greek Cyprus has been able to ink deals with Noble Energy and a consortium between Italy’s Eni and South Korea’s Kogas.

Despite a host of political and security challenges at home, Turkey has kept up the pressure, especially in light of Cypriot efforts to establish export partnerships with another active regional energy actor, Israel. Furthest along in their energy exploration and production efforts, Israel has announced that they will reserve 40 percent of their reserves for an export market, though how this will happen is still unclear. Both Cyprus and Turkey have advocated for a role in moving Israeli reserves towards Europe, with Nicosia offering Liquified Natural Gas options and Ankara suggesting a subsea pipeline. With substantial revenues and energy investment access at stake, Israel’s decision could add still further tension to the situation.

However, not all have found the region’s offshore potential as a cause for security concern. Instead, some have found reason for hope in the gas finding, with reunification proponents arguing that the quickest way to mend fences between the Republic of Cyprus and the Turkish Republic of Northern Cyprus energy cooperation. This week saw reunification talks resume after an 18 month break, with the region’s energy potential cited as a possible incentive for progress. According to a BBC report, leaders on both sides of the debate called the status quo “unacceptable”, with the island’s offshore potential emerging as incentive for a long-sought peace deal. Cyprus has been split in two since 1974, with the Turkish Republic of Northern Cyprus declaring themselves a state in 1983, though they have failed to earn official recognition from anyone except for Turkey since.

Source: Forbes Business

 
 
 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Need for Speed Reboot is Coming This Fall
Need for Speed Reboot is Coming This Fall
EA will release a complete new Need for Speed this fall. The video game giant just released a teaser video and the first Need for Speed Gameplay video will be revealed in June.
 
 
Google Self-Driving Cars to Hit Public Roads this Summer
Google Self-Driving Cars to Hit Public Roads this Summer
Google announced today that Google Car prototype vehicles will leave the test track and hit the familiar roads of Mountain View.
 
 
Google Search Analytics Launched in Web Master Tools
Google Search Analytics Launched in Web Master Tools
Google officially announced the new Search Analytics feature in Webmaster tools.
 
 
T-Mobile Hits Verizon with new 'Never Settle Trial' Campaign
T-Mobile Hits Verizon with new 'Never Settle Trial' Campaign
In case customers don't feel satisfied, T-Mobile will pay for them to shift back to Verizon