Saturday, 27 December 2014

Cyprus and Turkey - Oil Troubles

The Republic of Cyprus adopted the Territorial Sea Law in 1964. The law established a 12 nautical mile territorial waters. Coordinates of these territorial waters were submitted to the United Nations in 1993 and were reconfirmed in 1996. Cyprus ratified the United Nations Convention on Law of the Sea (UNCLOS) in 1988, and in 2004 they adopted a new law which limited its Exclusive Economic Zone (EEZ) by 12 nautical miles. The EEZ was established through bilateral agreements with Israel, Egypt and Lebanon.

The area of highest interest to Cyprus within their EEZ is block 12, which is approximately 3,200km2 in size and borders Israel's own EEZ. In November 2008, the Houston-based Noble Energy received permission to begin exploring block 12, otherwise known as the Aphrodite field. In August 2011, Noble Energy entered into a production-sharing agreement with the Cypriot government regarding the block's commercial development. Sources in Cyprus indicated in mid-September that Noble Energy had commenced exploratory drilling on the block. Although threatened by Turkey, the drilling, which was backed by the United States, the European Union, Russia and the United Nations, went ahead without incident on 19 September 2011. Noble Energy managed to return 2.6 to 6 trillion cubic feet (tcf) of natural gas.

More recently, the South Korean-Italian joint venture, ENI-Kogas, have not found enough commercially exploitable natural gas in their first exploratory drilling at the Onasagoras field in block 9. ENI-Kogas also hold concessions on blocks 2 and 3, as well as block 9. According to the Cypriot energy ministry, headed by George Lakkotrypis, ENI-Kogas will complete drilling in the Onasagoras field in the next few days and move on to the Amathusa field, also located in block 9. The company has identified six potential gas fields in the block in total.

French energy giant Total has licences to explore blocks 10 and 11, both of which border the Egyptian waters of the Nile Delta. Total plans to begin work in 2015.

This is all well and good, but the area around ENI-Kogas' drilling has become the focus of a dispute between Cyprus and Turkey, which has dispatched its own research vessel to the area. The move came after Ankara, the Turkish capital, issued a maritime notice (NAVTEX) reserving certain areas of the EEZ for surveys from 20 October to 30 December. Turkey's action prompted a strong international response, with the Greek Deputy Prime Minister and Minister of Foreign Affairs, Evangelos Venizelos condemning it as a "brutal violation of the international law of the sea."

This is not the first time Turkey have used physical force to try and stop or damage Cypriot efforts to drill. In November 2008, Turkish naval vessels harassed Cyprus contracted vessels conducting seismic exploration for hydrocarbon deposits in waters south of the island. In 2011, when drilling was just beginning, Turkey organised a major air and naval exercise in the region and the Russian Navy also dispatched two nuclear attack submarines to the Eastern Mediterranean to observe the situation. Israel also increased the number of surveillance flight operations in the Eastern Mediterranean, although it was not clear whether these flight operations actually passed over the Nicosia Flight Information Region, aka Cyprus. 

Luckily, nothing kicked off in 2011, but who is to say it will not kick off this time?

In October 2014, following the incursion of the Turkish research vessel, Nicos Anastasiades suspended the reunification talks between northern and southern Cyprus. Ahmet Davutoglu, the Turkish Prime Minister, recently visited Greece and may well have paved the way for the resumption of talks between the two parts of Cyprus. Davutoglu met with the Greek Prime Minister, Antonis Samaras, and they held a High-Level Strategic Council meeting discussing the future of Cyprus. “On Cyprus, we want negotiations to begin as soon as possible. We held very positive talks. They will continue. We embrace the approaches that put our mutual interests forward in the Eastern Mediterranean and in the Aegean," said Davutoglu.

The Turkish Cypriot negotiator, Ergun Olgun, has, just several hours ago, confirmed reports that the Turkish research vessel, Barbaros, is leaving Cyprus' Exclusive Economic Zone. The departure of the vessel could pave the way for the resumption of the UN-led talks between Northern Cyprus and southern Cyprus.

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