Latest Headlines

Cyprus Gas Fields – Killing Fields?

30 October 2012

As reported last week, Alexander Downer, the UN envoy for Cyprus, will visit the parties involved with the Cyprus peace process in the second half of November.

Meanwhile, the Republic of Cyprus government, wasting no time, will have decided upon a shortlist of potential bidders for nine gas and oil drilling concessions in waters off the Southern Cyprus shore by the end of October.  Turkey sees this as contentious and Ankara argues that until political unity is reached in Cyprus, no government has the right to negotiate over Cyprus’ territorial waters.

The discovery of these fields should be a great bonus and a much needed financial shot in the arm to both sides of the island. However, inevitably it has further fuelled (no pun intended) the long held disagreements on the division of Cyprus.

Late last year an American company, Noble Energy, confirmed that it had discovered gas at the Block 12 concession, located in the Aphrodite gas field in Cypriot waters, 34km (21 mi) west of Israel’s Leviathan field. The company estimates there are reserves of between 5 and 8 trillion cubic feet of gas (with gross mean resources of 7 trillion cubic feet), a find thought to be worth approximately €100 billion.

In quick succession, in December, the RoC government signed a maritime agreement with Israel, delineating territorial borders between themselves and Cyprus. Turkey announced its disapproval and said that the agreement was ‘null and void’ because RoC had ignored the rights and jurisdiction of Turkish Cypriots and they threatened to stop oil companies tendering for Turkish energy projects if they began drilling off the Cypriot coast.

North Cyprus Rig

North Cyprus gas drilling, Iskele

In April this year, Turkey made an equally contentious gesture by drilling for oil and gas onshore in Northern Cyprus despite protests from the RoC that the action was illegal. The state Turkish Petroleum Corporation (TPAO) began drilling a 3,000m (9,840ft) deep well near the town of Iskele.

In the unlikely event of an agreement between all parties involved, how far is Turkey willing to go to protect potential revenues from gas and oil fields in the Cypriot waters?

These complicated issues have raised many questions. If Greek Cypriots claim that Cyprus should be re-unified, would they be willing to share the gas field profits with Turkish Cypriots? Turkish relations with Israel have cooled considerably since last year when it sent warships to escort a vessel carrying Palestinian refugees. Prior to that, two years ago an Israeli warship attacked a Turkish vessel on an humanitarian mission to Gaza, thus spawning further conflict between Turkey and Israel. If there were hostilities between Turkey and Israel (given the agreement between Cyprus and Israel) how might Cyprus as a whole be affected?

By