Saturday, October 18, 2014

Russia naval exercise ‘no coincidence’ to Turkish actions | CYPRUS MAIL

Presidents Anastasiades&Putin at the Asia-Europe Meeting in Milan
October 18, 2014
By Stefanos Evripidou

RUSSIA’s decision to hold navy exercises in waters east of the island on Monday, the same day Turkey intends to send its seismic research vessel into Cypriot offshore blocks, is no coincidence, government spokesman Nicos Christodoulides said yesterday.

Speaking to the public broadcaster from Milan, Christodoulides said: “Nothing is by chance in politics.”

He made the comments after President Nicos Anastasiades met Russian President Vladimir Putin late on Thursday on the sidelines of the Asia-Europe Meeting (ASEM) in Milan.

Friday, October 17, 2014

The Reasons Behind the New Friction between Cyprus and Turkey - NATURAL GAS EUROPE

This map represents the offshore blocks licensed in Cyprus' EEZ
(CYPRUS Ministry of Energy)
October 16th, 2014

New tensions between Turkey and Cyprus have led to the disruption of the peace talks aimed at reuniting the divided island of Cyprus. On October third, the Turkish Government issued a NAVTEX note announcing its plans to carry out between October 20th and December 20th seismic surveys within offshore blocks of the Cyprus’ EEZ already licensed through international bidding. These surveys include a block where the Italian ENI – Korean KOGAS consortium is currently carrying out exploratory drilling. As a result of Turkey’s actions, President Anastasiades decided to suspend his participation in the talks for the settlement of the Cyprus issue.

ENI/KOGAS’ activities are of high importance for the island. The Republic of Cyprus has hopes that the consortium will encounter additional amounts of natural gas that will justify the commercial viability of a multi-billion onshore LNG terminal to be built on the Vassilikos coast of Cyprus. Noble Energy announced its discovery of the Aphrodite field in Block 12 of the island in 2011, but the field is estimated to hold between 3.6 to 6 Tcf (with a mean of 5 Tcf), not enough to encourage a final investment decision for the LNG project. Cyprus adopted the LNG terminal as a national project given its belief that the strategic location of the island connecting the East to the West, its EU membership and the longstanding excellent relations with all neighboring countries (Lebanon, Cyprus, Israel, Egypt and Jordan) are favorable to it becoming a regional energy center, acting as a factor of stability.

Wednesday, October 15, 2014

Cyprus talks need rethink as gas hardens divides | Interfax

Cyprus talks need rethink as gas hardens divides

By Leigh Elston
Posted 15 October 2014 12:52 GMT
Cypriot President Nicos Anastasiades (centre) and Turkish-Cypriot leader Dervis Eroglu at peace talks in March. (PA)Cypriot President Nicos Anastasiades (centre) and Turkish-Cypriot leader Dervis Eroglu at peace talks in March. (PA)
While it has been hailed as a catalyst for re-uniting Cyprus, the potential gas bounty off the coast of the island has only entrenched political divides. The latest flare-up in tensions came when Turkey issued a Navigational Telex (NAVTEX) on 3 October stating it was reserving areas south of Cyprus for seismic surveys from 20 October to 30 December. In response, Cypriot President Nicos Anastasiades suspended peace talks. 
Cyprus and Turkey were in the same position three years ago. When Noble Energy started drilling in Block 12 offshore Cyprus in September 2011, Turkey also sent seismic ships to the area, observed by military vessels. 
“The only difference this time seems to be the NAVTEX notice and the stronger Greek Cypriot reaction by suspending the settlement negotiations,” said Fiona Mullen, of Nicosia-based energy advisory Strata Insight. 
Turkey’s stance
Turkey has two claims over Cyprus’s exclusive economic zone (EEZ). The first is on behalf of Turkish Cypriots, whom it believes have equal rights to exploit the island’s offshore resources. The second is its own claim its continental shelf stretches to the west of Cyprus and partly covers blocks 1, 4, 5, 6 and 7 as delineated by Nicosia. Cyprus has only issued licences for blocks 2, 3, 9, 11 and 12.
Turkey is one of only seven countries in the world not to have signed the United Nations Convention on the Law of the Sea (UNCLOS) – a treaty that has become customary international law for governing rights and responsibilities over maritime territory.
The law asserts the EEZ of a state – which includes islands – runs up to 322 km from its shore. This means that, although Turkey has a long coastline, under UNCLOS its access to the sea is limited by Cyprus and the archipelago of Greek islands, Marianna Charalambous, a Cyprus-based legal consultant with expertise in maritime boundaries, told Interfax.
But since Turkey has not signed UNCLOS and recognises neither the Republic of Cyprus nor the EEZ of islands, it divides its territorial waters using the median line between itself and the states it recognises (Egypt, Lebanon, Israel, Syria and mainland Greece).
“However, under international law Turkey has absolutely no legal right to the EEZ of Cyprus,” said Charalambous.
Turkey’s NAVTEX has not yet affected Cyprus’s latest exploration campaign. A joint venture between Eni and Kogas, which started exploratory drilling at Block 9 on 26 September, is continuing its activities, independent LNG expert Charles Ellinas told Interfax. Eni has not commented on the issue.
 However, even if operations continue as normal for now, the fear of an escalation adds another layer of investment risk in Cyprus. “I worry the way in which it has been reported – talk of sending warships when all ships have right of passage in a country’s EEZ – could put off anyone considering investing in gas export infrastructure,” Mullen told Interfax.
A new route to negotiation
Cyprus cannot afford further costly obstacles to exploiting its gas. It already has to address the challenge of its limited reserves, its junk credit rating and – if it misses the 2018-2020 window to market its gas – the prospect of falling global gas prices, according to a report by the PRIO Cyprus Centre.
However, the prospect of unilateral gas development seems only to have frustrated the prospects for a reunification agreement, meaning there is perhaps a stronger case than ever for negotiating a settlement under a different framework.
Under a proposal put forward by International Crisis Group, Greek Cypriots would give Turkish Cypriots independence and the EU would then offer them the right to join the EU – reunifying the island in all but name and government. In return, the Turkish side would give Greek Cypriots full rights over gas in the future Republic of Cyprus waters, offer full compensation for property, withdraw troops, return occupied territory and end the demand for ‘guarantees’ over the country that accompanied the island’s independence in 1960, Hugh Pope, Crisis Group’s Deputy Program Director, Europe and Central Asia, told Interfax.
While such a gas-for-land deal would allow Cyprus to exploit its reserves unhampered and – after normalising relations with Turkey –access to a large and lucrative gas market, the proposal has gained little traction. 
“I think that right now it would be political suicide for any Greek Cypriot politician to promote it,” said Mullen. “It is also likely to lead to inflation in property compensation so it would be a terrible waste of gas revenues.”
It looks for now as if both sides will continue with the status quo, meaning a stalemate in resettlement talks and an uncertain economic future for both sides.
Link to source: http://interfaxenergy.com/gasdaily/article/13927/cyprus-talks-need-rethink-as-gas-hardens-divides

Tuesday, October 14, 2014

Κασίνης: Δεν θα βρουν εταιρεία για γεώτρηση οι Τούρκοι - SIGMA LIVE

Οκτώβριος 14, 2014
Δύσκολα η Τουρκία θα βρει εταιρεία η οποία να δεσμεύσει γεωτρύπανο για να πραγματοποιήσει γεώτρηση εντός της κυπριακής ΑΟΖ δήλωσε ο Σύμβουλος Ενεργειακής Πολιτικής του Πρωθυπουργού της Ελλάδας, Σόλωνας Κασίνης.

Μιλώντας στην εκπομπή Μεσημέρι και Κάτι, ερωτηθείς πώς θα αντιδράσουμε σε περίπτωση που η Τουρκία βάλει τρυπάνι στην κυπριακή ΑΟΖ, είπε ότι καταρχήν θα πρόκειται για μια παράνομη ενέργεια που παραβιάζει το διεθνές δίκαιο και το δίκαιο της θάλασσας. Ως εκ τούτου είπε θα πρέπει να αποταθούμε σε τις φίλιες χώρες όπως η Ελλάδα, η Αίγυπτος και το Ισραήλ, αλλά και την ΕΕ ζητώντας ουσιαστικές κυρώσεις σε βάρος της Τουρκίας.

Πρόσθεσε επίσης ότι η Τουρκία δεν θα βρει εύκολα εταιρεία για να κάνει τέτοια γεώτρηση, καθώς θα πρόκειται για παρανομία.

Τέλος σχολιάζοντας τη διακρατική συμφωνία Κύπρου-Ελλάδας, είπε ότι είναι προς την ορθή κατεύθυνση και θα βοηθήσει να μπουν κάποια πράγματα σε πιο ορθολογική βάση.

SOURCE

Israel's Challenges in the Eastern Mediterranean | Middle East Quarterly

Middle East Quarterly
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FALL 2014 • VOLUME 21: NUMBER 4




Link to source: http://www.meforum.org/4804/israel-challenges-in-the-eastern-mediterranean

Monday, October 13, 2014

Renewed Tensions Between Cyprus and Turkey | Natural Gas Europe


October 13th, 2014




Cyprus calls for help. The island, eager to pursue and accelerate its offshore activities in the hope of encountering more natural gas that would allow the construction of an LNG facility, has found itself in a new conflict with Turkey. Turkey, an EU candidate state, sent a research vessel and two navy ships in the disputed waters off Cyprus to express its opposition to ENI and KOGAS’ drilling in Block 9 southeast of the island.
The Turkish had repeatedly stated that all revenues generated from successful drilling activities off the island should benefit both Turkish and Greek Cypriots and that Turkey would undertake unilateral drilling in the absence of an equitable distribution.
As a result to Turkey’s action, Cyprus President Nicos Anastasiades this week suspended peace talks with the Turkish-controlled north of the island. Peace talks aimed at achieving a settlement to end the division of the island are now in danger. Cyprus has been divided since a 1974 coup and all attempts to reunify the island have failed thus far. “Turkey has no logical or legal basis for its actions”, said Yiorgos Lakkotrypis, Minister of Energy for Cyprus to Natural Gas Europe.
Since the discovery of natural gas in the Levant basin, each of the Eastern Mediterraneancountries has been struggling with problems of its own. Neighbouring Lebanon has not been able to launch its first licensing round due to domestic political deadlocks. Israel allowed gas exports via Netanyahu cabinet decision dated 2013 but has since failed to achieve a finalisedexport strategy.
Cyprus is awaiting further natural gas discoveries off its coast to take a final investment decision for the construction of a multi-billion export terminal on the Vassilikos coast. TheAphrodite field discovered in 2011 by Noble Energy and believed to hold 3.6 to 6 Tcf of natural gas does not justify alone the commercial viability of the project.
The escalation between the Turks and the Cypriots may jeapordise peace talks but explorations activities are ongoing and will not be disrupted, according to a statement from the italian company.Fiona Mullen, director of Cyprus-based Sapienta Economics told Natural Gas Europe that Turkish-Cypriots were acting in a "tit for tat manner: You explore, I explore. You drill, I drill". Asked if Cyprus' offshore progress could be impeded due to Turkish complications, she said: “Turkey's actions raise investor risk perceptions, which can deter investors or raise company costs. As long as the Cyprus problem remains unresolved, this issue will not go away and may get worse, depending on political developments in Turkey.”
Dr Charles Ellinas, oil and gas expert with over 30 years of experience in the industry and previous Executive President of Cyprus National Hydrocarbons Company Ltd, Cyprus told Natural Gas Europe that Cyprus’ Exclusive Economic Zone was delineated in accordance with UNCLOS. He added that Cyprus’ delineation of its waters was recognized by its neighbours, Egypt, Israel and Lebanon as well as the UN and the international community. Ellinas said that ENI/Kogas were carrying on their exploration drilling programme as planned. “Noble also made it clear that its plan remained unaffected. In fact, Noble presented the government with the results of its detailed techno-economic studies on the possible export options, necessary for the preparation of the development plan for Aphrodite. They did this despite the threats from Turkey” added Ellinas.
If the immediate gas explorations are not threatened by the new conflict between Turkey and Cyprus, a permanent solution needs to be achieved. The Eastern Mediterranean, blessed with gas, seems hampered by historical discords that may jeopordise its long term growth and prosperity. In a discussion with Natural Gas Europe, Dr Alan Riley, professor of law specialised in the fields of energy and competition law commented on Turkey’s actions: "Legally, Cyprus has the right in international law to drill for offshore oil and gas. The issue here however, as ever with the ongoing conflicts in the Eastern Med is not law but politics".
Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. She reads International Relations and Contemporary War at King's College London focusing on Natural Resources and Conflict. She holds an LLM in Commercial Law from City University London and a Bachelor of Laws from Université Saint Joseph in Beirut. Email Karen karen@minoils.com Follow her on Twitter: @karenayat
Link to source: http://www.naturalgaseurope.com/cyprus-turkey-renewed-tensions

Israel Sees Gas as Key to Transforming Mideast Relations | Bloomberg

Israel Sees Gas as Key to Transforming Mideast Relations

By Shoshanna Solomon and Calev Ben-David
Οκτώβριος 13, 2014 7:00 μμ EDT
Israel’s gas bonanza “is a huge strategic advantage that allows us to enjoy both political and economic fruits,” Israeli Energy Minister Silvan Shalom said in an interview.
Photographer: John Moore/Getty Images
Israel’s gas bonanza “is a huge strategic advantage that allows us to enjoy both political and economic fruits,” Israeli Energy Minister Silvan Shalom said in an interview.
After this summer’s war in Gaza battered Israel’s international reputation, the country’s leaders say they have a new foreign policy tool to build relations with its neighbors: natural gas.
By the the end of the year, Israel may have binding agreements to sell billions of dollars of gas to Egypt, Jordan and the Palestinian Authority. Preliminary talks are taking place with customers in Turkey, even though President Recep Tayyip Erdogan is among Israel’s fiercest critics. Gas may even help improve relationships in the Gaza Strip.
“There are now extraordinary opportunities for Israel based on energy policy, both economically and diplomatically,” said Israeli Foreign Ministry spokesman Emmanuel Nachshon. “This is a real game-changer of common interests and benefits for many actors in the region. It could also bring about better relations with Turkey, and with other regional actors with whom Israel is not yet in close contact.”
Israel’s chance to be a regional energy power comes from two mammoth fields under the Mediterranean Sea, holding more gas than the country could consume in decades. In addition to building ties with neighbors that have often been antagonistic since the state was founded in 1948, gas exports will be a fillip for Israel’s economy, improving the balance of trade and boosting economic growth by as much as a percentage point.
Israel’s gas bonanza “is a huge strategic advantage that allows us to enjoy both political and economic fruits,” Israeli Energy Minister Silvan Shalom said in an interview. “We are much more accepted in the world as a result of us finding natural gas.”

Tamar, Leviathan

The Tamar gas field was discovered off Israel’s Mediterranean coast in 2009 and the Leviathan field a year later. Together, they hold an estimated 29 trillion cubic feet.
Selling the gas to other markets may be more of a challenge than extracting it. Israel’s relations with its Arab and Islamic neighbors range from cool acceptance to virtual states of war, and getting the fuel to international markets will require the country to navigate a minefield of geopolitical hazards.
Partners in the Leviathan field, including Houston-based Noble Energy Inc. (NBL), the Israeli units of Delek Group Ltd. and Ratio Oil Exploration 1992 LP signed a preliminary deal Sept. 3 to sell about $15 billion of gas to Jordan’s National Electric Power Co. over 15 years. That followed supply deals earlier this year with Jordan’s Arab Potash Co. and the West Bank-based Palestine Power Generation Co.

‘Fundamental’ Orientation

Some analysts caution against excessive Israeli optimism that energy resources may help ease regional tensions heightened by its policy toward Palestinians, and other contentious issues.
In the Middle East, “you don’t see countries change their fundamental strategic orientation because of economic issues,” said David Wurmser, director of Delphi Global Analysis Group in Rockville, Maryland.
That said, diplomatic considerations and economic interests will both play a key role in pending decisions by Egypt and Turkey on whether to form energy ties with Israel that will enable it to export gas beyond its immediate neighbors and into the global market.
“When you have something other people need, then people are prepared to talk to you. And when you talk, ice is broken in other areas,” Yaniv Pagot, chief strategist at Israel-based Ayalon Group Ltd., said in a phone interview. “Talk about economics could be a base for political communication.”

Slowing Economy

The prospect of gas exports has become even more alluring given Israel’s economic slowdown. The Bank of Israel cut its 2014 growth forecast for the country on Sept. 22, to 2.3 percent, from 2.9 percent at the end of June. The 2015 forecast is 3 percent, still below the nation’s 3.2 percent growth last year. Exports account for about a third of Israel’s $270 billion economy, with the country’s main trading partners being the U.S. and China, according to data compiled by Bloomberg.
The Tamar and Leviathan partners signed preliminary agreements this year to deliver as much as 6.25 trillion cubic feet to two liquefied natural gas terminals operated in Egypt.
Noble and Delek’s Avner Oil Exploration LP and Delek Drilling-LP units are planning to send the gas to Egypt through pipelines under the Mediterranean Sea. They expect binding agreements to be finalized by year end, pending Egyptian government approval.

Trade Reversal

That would be a significant reversal. Egypt exported gas to Israel until 2012 through a pipeline across the Sinai. Egypt canceled the contract after multiple attacks by militants on the conduit.
“We are talking about perhaps an initial $60 to $70 billion of gas sales to Egypt and Jordan over 15 years,” Pagot said. “This could translate into $2.5 to $3 billion dollars in exports a year, which would represent 1 percent of Israel’s GDP.”
Selling gas may help warm trade relations with Egypt and Jordan, which now are closer to lukewarm, totaling around $170 million and $365 million respectively last year. Importing the fuel would help Jordan and Egypt ensure much-needed energy security, said Michael Leigh, senior adviser to the German Marshall Fund of the United States, a Washington-based public policy institute.

Energy Security

“Jordan is under tremendous pressure as a result of the violent conflicts in Iraq and Syria. Israel is making a contribution to the political stability of Jordan by strengthening the country’s energy security,” Leigh said. “Egypt is in a tight squeeze, with a drop in domestic gas production. The opportunity to import gas from Israel is an attractive way to satisfy domestic demand.”
Noble and its Israeli partners are also targeting Turkey, Delek Chief Executive Officer Asaf Bartfeld said in September. Turkey’s Zorlu Enerji Elektrik Uretim AS (ZOREN) said last year it is in preliminary talks with Noble and Delek for a 15-year gas deal, and Turcas Petrol AS has said it’s considering building a pipeline from Leviathan at a cost of about $2 billion to import gas.
They may face opposition from the government. Turkey’s president Erdogan is a fierce critic of Israel’s policy toward Palestinians and Energy Minister Taner Yildiz said in August his country won’t participate in any gas projects with Israel unless the country changes its Gaza policies.

Business, Politics

Business probably won’t trump politics in Turkey, said Delphi Global’s Wurmser. “The ideological proclivities of Erdogan will ultimate sabotage any deal with Israel.”
Israeli energy diplomacy may get another boost from a gas field discovered in 2000 by BG Group Plc about 30 kilometers off the coast of the Gaza Strip in waters under the legal authority of the Palestinian Authority, which controls parts of the West Bank. Development of BG’s Gaza Marine license has stalled due to the conflict between Israel and the Palestinians, and the internal divide between Palestinian President Mahmoud Abbas’s Fatah faction and the Hamas Islamic movement that rules Gaza and is classified as a terrorist group by Israel, the U.S. and European Union.
The Palestinian Authority’s energy and resources minister Omar Kitaneh has said that while developing the Gaza field and other joint energy projects may help ease Israel’s entry into the Middle East market, further steps are dependent on advancing the peace process. That prospect was set back in recent months by the collapse of Israeli-Palestinian peace talks in April, and the Israeli military operation against Hamas in Gaza over the summer.
Further down the road, Israeli policy makers are looking at potential links with the fuel-rich Sunni Arab nations of the Persian Gulf, with regional economies connected by gas.
“The European Union began as a coal-and-steel union in the 1950s, and theoretically, natural gas can serve the role for this region that coal served for the EU,” said the Foreign Ministry’s Nachshon.
To contact the reporters on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net; Calev Ben-David in Jerusalem at cbendavid@bloomberg.net
To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net; Samuel Potter at spotter33@bloomberg.net Will Wade



Link to source: http://mobile.bloomberg.com/news/2014-10-13/israel-sees-gas-as-key-to-transforming-mideast-relations.html