Feuds continue over Turkey’s East Med gas drilling as global energy prices plummet

Despite the falling financial viability of several eastern Mediterranean energy projects, Turkish gas drilling activities are set to continue in the region, drawing condemnation from five nations Ankara accuses of forming an "alliance of evil."

al-monitor The Turkish drilling vessel Yavuz is escorted by Turkish Navy frigate TCG Gemlik (F-492) in the eastern Mediterranean Sea off Cyprus, Aug. 6, 2019.  Photo by REUTERS/Murad Sezer.
Diego Cupolo

Diego Cupolo

@diegocupolo

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cyprus, turkish cypriots, oil prices, oil and gas, energy industry, turkish energy, drilling, gas exploration, eastern mediterranean

May 12, 2020

ISTANBUL — With global energy prices down sharply amid the coronavirus pandemic, tensions remain high over disputed gas reserves in the eastern Mediterranean Sea.

Turkish drilling ships are reportedly prepping to continue gas exploration activities in the region, drawing condemnation from the Republic of Cyprus, Egypt, France, Greece and the United Arab Emirates in a joint statement Monday. The five nations accused Turkey of violating international laws through its operations in waters claimed by the Republic of Cyprus, which Ankara does not recognize.

In response, Hami Aksoy, a spokesperson for the Turkish Ministry of Foreign Affairs, accused the nations of forming an “alliance of evil” in a strongly worded statement Tuesday, saying the group had “fallen into a delirium, as their agendas are being disrupted by Turkey.”

The feud comes as several eastern Mediterranean gas projects have been delayed by the COVID-19 outbreak and a slump in global energy prices has rendered the deep water drilling required in the region financially unviable for the foreseeable future, according to analysts tracking the industry.

Yet the spat has apparently become less about profits and maritime borders, and is now more clearly delineated by geopolitical interests rising from the Libyan conflict, where Ankara is backing the UN-recognized Tripoli government and the five-nation bloc is supporting eastern Libya's Khalifa Hifter in his ongoing offensive to rule the nation.

“There are overlapping concerns in the UAE and Greece regarding Libya and maritime zones that apparently facilitated the statement,” Erol Kaymak, a professor of political science and international relations at Eastern Mediterranean University in Northern Cyprus, told Al-Monitor.

“Given the status of the market, the energy companies will have to postpone drilling work irrespective of the maritime disputes,” Kaymak continued. “So, one would think that Turkey could also oblige with its own moratorium but apparently not. This is more about sovereign rights than any economic calculus.”

Since gas reserves were discovered within Cypriot maritime borders in 2011, Ankara has maintained energy profits should be shared equally between the Republic of Cyprus, in the island’s south, and the Turkish Republic of Northern Cyprus, a breakaway nation formed after a 1974 Turkish military incursion that remains solely recognized by Ankara.

To date, the governments in northern and southern Cyprus have yet to reach a profit-sharing agreement, and the stalemate led Ankara to pursue its own gas drilling activities within Cypriot territorial waters in recent years. Turkish officials have said they are an effort to preserve Northern Cyprus' sovereignty and energy rights.

Regional energy disputes were further aggravated in November, when Ankara and the Tripoli government signed a memorandum claiming territorial waters between Cyprus and the Greek island of Crete. This week’s developments underline the continued failure to reach diplomatic solutions, and the added involvement of the UAE in the latest declaration could further polarize the parties involved.

“From the Cyprus point of view, I think they are trying to internationalize this a little bit more, probably because they are disappointed with the EU’s response,” Fiona Mullen, director of the Nicosia-based research consultancy Sapienta Economics, told Al-Monitor.

In effort to curtail Turkish drilling activities in the eastern Mediterranean, political leaders in the Republic of Cyprus have lobbied European Union officials for support. After repeated warnings, Brussels imposed sanctions on two Turkish nationals in February in retaliation for Ankara’s ongoing operations in the region. Mullen said the measures were perceived as too limited and ineffective by southern Cypriots, as Ankara has continued its drilling activities.

She stipulated the shortcomings may have driven the Republic of Cyprus to seek a broader coalition to counterbalance Ankara in the region.

“Will it make any difference? Probably none at all,” Mullen said regarding Monday’s joint statement. “I’m surprised Turkey’s even bothering to send drill ships to Cyprus, given the state of the oil and gas market at the moment.”

Due to the pandemic's impacts on the energy sector, the American energy giant ExxonMobil announced last month it was postponing planned drilling on a gas field in Cyprus’ Exclusive Economic Zone until September 2021. A pipeline project to transport gas from Cyprus’ Aphrodite gas field to Egypt remains intact but contracts have yet to be finalized.

Meanwhile, market pressures have cast doubt on the high-cost EastMed pipeline project, which would link Israeli fields through Cyprus and Greece to reach European consumers, according to Mullen.

“Apart from Egypt’s Zohr [gas field], which is already being exploited, and Israel’s Leviathan, none of the finds have been big enough to really commercialize, and so in a way, what COVID-19 did was put the nail in the coffin of something that was already getting commercially quite wobbly,” Mullen said regarding energy projects in Cyprus.

With disputes likely to continue in a variety of forms between Turkey, Cyprus and nations backing Hifter in Libya, some analysts predict energy companies will begin pulling out of the eastern Mediterranean region as the profit margins diminish and political uncertainties prevail.

Harry Tzimitras, director of the Peace Research Institute Oslo Cyprus Centre, said further delays in gas field development could lead to the cancellation of certain projects, as renewable energy sources continue to become more cost effective, particularly in comparison to deep water energy extraction projects in the eastern Mediterranean.

“It never was majorly about energy, what Turkey is doing in the eastern Mediterranean. It is a power projection,” Tzimitras told Al-Monitor. “And I think what is happening now with the continued presence and drilling of Turkey in the region, it only proves further that it had very little to do with energy.”

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