Eastern MEDITERRANEAN SEA

ISRAEL’S FIRST STATE VISIT TO CYPRUS AND ITS GEO-STRATEGIC REPERCUSSION FOR THE REGION

ENORMOUS OIL AND GAS FINDINGS IN THE LEVANTINE THREATEN THE “MONOPOLY” OF TRADITIONAL OIL PRODUCING COUNTRIES IN THE MIDDLE EAST 

To complicate the already fragile “coexistence” of ISRAEL and its ARAB neighbors, the prospect that ISRAEL, the arch foe of most ARAB counties could be a direct competitor in oil export in the not too distant future must cause alarm among the traditional oil producing countries and could also have indirect implications on the US strategic alliances with SAUDI ARABIA and the GOLF STATES.

If all is going according to plan, ISRAEL’S Prime Minister Benjamin Netanyahu will be visiting CYPRUS on February 16, the purpose of the trip – the first-ever visit by an ISRAELI prime minister to the island – is to boost cooperation on SECURITY and OFFSHORE DRILLING for natural gas and oil and an effort to create closer ties between the two nations.

SINCE TURKEY, OFFICIALLY AT LEAST, CUT TIES WITH ISRAEL, ISRAEL’S ONLY OPTION FOR FUTURE OIL AND GAS EXPORTS, GEO POLITICALLY SPEAKING, IS VIA “NEUTRAL” CYPRUS

The issue of gas and oil discoveries will clearly be a major topic of discussion during the visit for ISRAEL wants to strike an agreement with CYPRUS on cooperation in the delivery of the gas to markets in EUROPE and ASIA.

IAF (ISRAELI AIR FORCE) TO BE STATIONED IN CYPRUS

Historically speaking CYPRUS, for its strategic location in the MEDITERRANEAN SEA, has always been the focal point of military strategist. After gaining independence from the UK, CYPRUS was forced to accept two BRITISH SOVEREIGN BASE AREAS on its island which house a Signal Battalion in DHEKELIA operating sophisticated listening and observation devices directed towards the EAST and the Royal Air Force base in AKROTIRI which has been and still is used as a logistic and operational base for NATO coalition forces conducting operation in the Middle East.

Thus it comes as no surprise that ISRAEL is interested to establish external military presence in CYPRUS to compensate the loss of military cooperation and presence in TURKEY. It is therefore rumored that during the ISRAEL’S Prime Minster visit to CYPRUS, ISRAEL will also asked CYPRUS for permission to station military aircraft on the islands bases. 

THE TWO COUNTRIES RECENTLY SIGNED A COOPERATION AGREEMENT RELATING TO THE PROTECTION OF NATURAL GAS DRILLING SITES

The visit comes against a backdrop of worsening relations between ISRAEL and TURKEY following the May 2010 TURKISH flotilla incident, which is cited as the official reason for the rift between the countries but in reality it has always been because of the gas and oil findings and TURKEY’s double edged strategies of recent past. 

 

INCREASED DRILLING ACTIVITIES ANNOUNCED IN THE SOUTH EASTERN MEDITERRANEAN BASIN 

Prior to ISRAEL’S state visit in CYPRUS, NOBLE Energy (US-ISRAELI joint venture) announced that they will be back in Block 12 for more drilling sometime in the third quarter of this year.

At a symposium held in NICOSIA, organized by the INSTITUTE OF ENERGY OF SOUTH EAST EUROPE, based in GREECE http://www.iene.gr/Default.asp?lng=2 and the FMW media group http://www.fmwonline.com/, NOBLE Energy stressed that recent findings look encouraging and therefore the company decided to drill a second well in Block 12 which, according to estimates should hold between 5 and 8 trillion cubic feet (tcf) of natural gas at a depth of 5,860 meters. NOBLE stressed that this is only a pinhole and that more findings are imminent.

Noble’s next step would be to carry out engineering studies for the necessary facilities (for example the wellheads) as well as for a pipeline running from the field to the island’s southern shores of CYPRUS.

NATURAL RESOURCES FINDINGS ARE A ECONOMY AS WELL AS GEO POLITICAL BOOST FOR CYPRUS 

NOBLE’S proposal for building an LNG plant on the island to export the gas, saying this was a flexible solution for CYPRUS and would generate work for about 4000 people who would generate cash for the island as well as additional jobs created by spinoff businesses once CYPRUS becomes a natural gas producer.

GREECE’S DEPA (Public Gas Corporation) stated that the coming decade will see a growing supply gap for natural gas in EUROPEAN countries, and proposed that CYPRIOT gas be piped to GREECE and then onto BULGARIA and SOUTH-EASTERN EUROPE.

ISRAEL HAS BECOME A KEY STRATEGIC ALLY TO GREECE AND CYPRUS

GREECE plans to build an interconnector by 2014 that will link the country’s grid with the BULGARIAN network, channeling gas from the CASPIAN to the EUROPEAN continent. In conjunction to recent findings in the LEVANTINE, the governments of GREECE and CYPRUS stressed that ISRAEL has become a key strategic ally for both countries and thus the governments should rise to the occasion and take advantage of this opportunity.

Greek politicians attending the symposium in NICOSIA stressed that both countries should take a more pragmatic approach to politics, noting that the oft-cited traditional friendship with the ARAB WORLD is, in many respects, a myth for there is no such thing as one ARAB WORLD, and one should not forget that a number of member countries of the ORGANIZATION OF THE ISLAMIC CONFERENCE have recognized “NORTH CYPRUS”. See Cyprus conflict:

 http://en.wikipedia.org/wiki/Cyprus_dispute

 

ENORMOUS GAS FINDINGS AND PROSPECTS OF OIL FINDINGS COMPLICATE TURKEYS STANCE IN THE REGION 

New tension is brewing between TURKEY and CYPRUS after CYPRUS’ and ISRAEL’S enormous gas finds in the EASTERN MEDITERRANEAN in 2010-11 and TURKEY’S extremely negative reaction to those finds. TURKEY can be embroiled with a conflict, not only with CYPRUS, its EUROPEAN backers and ISRAEL, but with RUSSIA as well. The CYPRUS energy conflict demonstrates the urgency of making progress on the tangled issue of CYPRUS’ future and the relationships among its two ethno-religious groups.

2011 was a difficult year in TURKEY’S relations with CYPRUS and 2012 does not look much better. CYPRUS will hold the rotating Presidency of the EU from July to December and given a weak government at home, recent events will do nothing to ease conditions for TURKEY’S entry into the EU. That means it will not support nor make any concessions on the vexed issue of the TURKISH REPUBLIC OF NORTHERN CYPRUS. But those were not the issues that caused more tensions in 2011 and are likely to do so in 2012.

NEW TENSION BETWEEN TURKEY AND CYPRUS REVOLVE AROUND CYPRUS AND ISRAEL’S ENORMOUS GAS FINDS

The new tension between TURKEY and CYPRUS revolve around CYPRUS and ISRAEL’S enormous gas finds in the EASTERN MEDITERRANEAN in 2010-11. The issues relating to CYPRUS’ gas could embroil TURKEY, not only with CYPRUS, its EUROPEAN backers, and ISRAEL, but also with RUSSIA, its supposed friend and partner.

MUCH NEEDED ECO- FINANCIAL BOOST FOR CYPRUS AFTER RUSSIA’S BAILOUT, BUT WITH GEO STRATEGIC IMPLICATIONS 

During 2009 and 2010, CYPRUS and ISRAEL discovered enormous natural gas deposits off their shores in the Mediterranean Sea. And in late 2011 NOBLE ENERGY, the firm contracted by CYPRUS with exploring for gas in its waters, announced a discovery of gas estimated at 5-8 trillion cubic feet of natural gas there. This discovery could not come at a better time for CYPRUS, which in 2011 endured a slippage in its fiscal ratings, was shut out of international capital markets, hit by a large munitions blast, and was finally forced to accept a RUSSIAN bailout. All told, the discoveries by both countries amount to 33 trillion cubic feet of gas (ca. 1 trillion cubic meters). And the U.S. Geological Survey estimates that the Levant Basin, where most of these discoveries have occurred, may hold 122 TCF (3.4 tcm).

REDUCING TURKISH LEVERAGE UPON CYPRUS’ POLICIES REGARDING THE CYPRIOT TURKS AND CYPRUS’ OVERALL POLICIES IN GENERAL

But these discoveries also have some negative repercussions. They have heightened tensions on CYPRUS between the two states there and with Turkey. The discoveries offer CYPRUS the prospect of becoming a local economic powerhouse in contrast to the near disasters of 2011 and of thus reducing TURKISH leverage upon CYPRUS’ policies regarding the CYPRIOT TURKS and CYPRUS’ overall policies in general. 

INCREASE FOREIGN INVESTMENT 

Indeed, the gas finds to date give CYPRUS enough gas to meet its needs for an estimated 150 years, fully satisfy its electricity generating needs for 210 years, and provide it with billions of dollars of revenues that will allow it to become a major exporter to EUROPE once pipelines or tankers carrying liquefied natural gas (LNG) can be built. So it can also expect an influx of much more foreign EUROPEAN capital to build those facilities, strengthen and diversify its sources of foreign investment. It is likely that a pipeline will have to be built to connect with those that presently or soon will cross TURKEY, or that a liquefaction plant will need to be built to process CYPRIOT and ISRAELI gas finds. Not surprisingly, the “TRNC” government reacted coolly to the gas discovery and TURKEY, which does not recognize the government of CYPRUS, even sent an exploration ship accompanied by warships and fighter jets to the area after Noble started drilling.

TURKISH THREATS DEEPLY DISTURB CYPRUS AND RUSSIA

However, TURKEY’S threats against CYPRUS and ISRAEL due to their exploration and drilling for gas in the Eastern Mediterranean caused concern in RUSSIA. Moscow recently organized a large loan to CYPRUS to sustain it against a crisis should GREECE or CYPRUS default because so many RUSSIAN accounts are held in CYPRUS’ banks and then reinvested in RUSSIA or used to launder the elite’s money by cycling it out of RUSSIA into the global banking system. Clearly, Moscow cannot allow CYPRUS to go under. Turkish threats therefore deeply disturb both CYPRUS and RUSSIA. 

GREECE, CYPRUS, RUSSIA AND ISRAEL - CONNECTED BY FAITH  

One should not forget that GREECE RUSSIA and CYPRUS are close allies, not only because of economic bonds but also religion; they all are part of ORTHODOX CHRISTIANITY, something that should not be underestimated when it comes to fight for a common cause. Furthermore RUSSIA has certain interests in ISRAEL for there are more than one million RUSSIAN immigrants living in ISRAEL, some of whom are of extreme wealth. 

Once TURKEY’S navy openly threatened CYPRUS for signing an agreement with NOBLE ENERGY who also developed ISRAEL’S maritime gas fields, RUSSIA’S Ministry of Foreign Affairs publicly backed CYPRUS’ right to develop its Mediterranean gas. CYPRUS in turn labeled Moscow “a shield against any threats by TURKEY.” CYPRUS’ Prime Minister was also then able to charge TURKEY with being a regional bully. Furthermore, RUSSIA dispatched an aircraft carrier with fighter planes, and at least one submarine to CYPRUS as a show of support for in an open example of it version of gunboat diplomacy. In other words, Moscow made clear that it would not tolerate TURKISH threats against CYPRUS, adding another issue to what is becoming an increasingly troubled agenda of RUSSO-TURKISH relations. 

The natural resource findings will give Cyprus the leverage of no longer being economically vulnerable to TURKISH pressure or to demands for concessions regarding the TURKISH population on the island. This means a substantial diminution of any prospective influence TURKEY may have had in the past or hoped to have in the future.

CYPRIOT AND ISRAELI DISCOVERIES AND PLANS TO SELL GAS TO EUROPE DIRECTLY CUT AGAINST TURKISH ASPIRATIONS OF BEING A MAJOR ENERGY HUB FOR EUROPE.

Given CYPRUS’ partnership with ISRAEL, TURKISH threats against CYPRUS will aggravate the tense relationship with ISRAEL that has already caused major headaches for TURKEY in Washington and has left it with being in the bizarre position of simultaneously having deteriorating relations with IRAN, SYRIA, and ISRAEL. Economic ties between the two countries though, do not have seemed to diminish. 
(See: http://geopoliticsrst.blogspot.com/2012/01/see-no-evil-hear-no-evil.html) The size of the CYPRIOT and ISRAELI discoveries and the plans to sell much of that gas to EUROPE directly cut against TURKISH aspirations that are part of a deep elite consensus that Turkey’s geography makes it an energy hub for Europe. Now there could be alternative energy sources from the greater neighborhood that will go to Europe over which Turkey has little or no leverage.

RUSSIA LIKELY TO DEMAND ENTRÉE INTO FUTURE GAS BUSINESS FROM CYPRUS AND ISRAEL 

RUSSIA has already demonstrated its will and ability to check TURKEY in regard to CYPRUS. That interest will only grow in the future because it is inconceivable that Moscow, which sees itself as being EUROPE’S main supplier of gas, will simply let Israel and Cyprus cut in with such massive impact into its sales and compete with it at no cost. This does not mean the use of military force but it does suggest that Moscow will bring substantial pressure to bear on CYPRUS, especially since it bailed out CYPRUS from possible default by providing generous loans, if not ISRAEL, to demand entrée into the gas business from their recent discoveries.

RUSSIA’S PRESENCE IN THIS SECTOR OF THE GAS MARKET WOULD ENHANCE ITS LEVERAGE VIS-À-VIS TURKEY IN THEIR BILATERAL ENERGY DEALINGS AND LIMIT TURKEY’S ABILITY TO POSTURE AS A MAJOR ENERGY HUB 

Not only does this make it harder for TURKEY to coerce CYPRUS, it also has negative implications for TURKEY. RUSSIA’S presence in this sector of the gas market would enhance its leverage vis-à-vis TURKEY in their bilateral energy dealings and limit TURKEY’S ability to posture as an energy hub with the attendant benefits thereof. From time immemorial Geo-politicians and geographers of all stripes have known that whoever controls CYPRUS possesses the means to threaten with serious damage TURKEY’S Mediterranean ports. Given RUSSIA’S proclivities and that of its naval commanders who seek permanent anchorages and bases in the Mediterranean and may be in trouble in SYRIA due to its uprising, to seek such a facility at CYPRUS may be tempting. This challenges TURKISH security and NATO planning as well. But in conjunction with the TURKISH threats to CYPRUS and Moscow’s expected demand for a major place in CYPRUS’ energy trade, it is a highly probable outcome based on existing trends.

In past and present, CYPRUS has always been fought over because of its strategic position in the Mediterranean Sea, now natural resource findings at the shores of the island have add to the quest on who controls the Island. 

TURKEY’S ZERO PROBLEMS WITH NEIGHBORS HAS RUN AGROUND ON THE SHOALS OF THESE NEIGHBORS’ COMPETITIVE INTERESTS

The CYPRUS issue, considered in all its many dimensions, highlights the fact that TURKEY’S zero problems with neighbors has run aground on the shoals of these neighbors’ competitive interests with those of TURKEY and with great power politics in the overall Mediterranean basin. The CYPRUS issue also shows the limits of TURKISH power despite the ambitious and even aggressive rhetoric emanating from Ankara. It suggests the need for TURKEY to find a modus vivendi with CYPRUS, if not ISRAEL, as it did earlier with RUSSIA. Some will say that it also shows the need for arriving at such an outcome as well or continuing to abide by the existing one with Moscow. But here, in fact, there was such an agreement, and despite the recent energy agreements signed with RUSSIA, CYPRUS is merely one of many signs of what is arguably a worsening trend in TURKEY’S relations with a RUSSIA that is as ambitious as TURKEY and even more aggressive insofar as its vital interests are involved.

THE CYPRUS ENERGY CONFLICT ALSO SERVES ANOTHER REMINDER THAT ENERGY POLITICS ARE INSEPARABLE FROM LARGER SECURITY CONSIDERATIONS

The CYPRUS energy conflict also serves another reminder that energy politics are inseparable from larger security considerations and produce new issues and combinations that undermine the status quo. It also shows the urgency of making progress on the tangled issue of CYPRUS’ future and the relationships among its two ethnoreligous groups. 

Parts of above article have been adopt from “The Silk Road”