East Mediterranean energy security heading for confrontation

East Mediterranean energy security heading for confrontation

The multitude of offshore gas discoveries in the East Mediterranean have attracted regional cooperation & economic relations. However, maritime disputes & power projections of the main parties -Turkey, Greece & Cyprus- could lead to military confrontations

Ongoing offshore gas drilling operations in the East Mediterranean are threatening to cause military confrontations between NATO members, such as Turkey and Greece, as they are continuing with their offshore gas exploration activities in several contested areas. On October 31 Turkish offshore drilling vessel Fatih has started to drill at the Alanya-1 site, which is 100 kilometers from Turkish southern province Antalya. Greek and Cypriot government officials have warned already that these operations are in disputed areas. Since the end of the Ottoman Empire, and the establishment of the Turkish Republic, Greece and Turkey have been in maritime border disputes.

At the same time, the East Mediterranean region has become a real hotspot for offshore oil and gas operations, as after discoveries have been made by Egypt and Israel. Due to the immense prospectivity of these reserves, others, such as Cyprus, Greece, Lebanon and Turkey, have become very active too. Main point of contention at present is around the island of Cyprus, which is still partly occupied by Turkish military, and the areas between Greece and Turkey.

The potential for a direct military confrontation has increased substantially, as Athens and Ankara are heading for a direct collision course at present. Not only is Athens worried about Turkish moves, but it also is supporting Cyprus to open its vast offshore gas (and potentially oil) reserves. The Greek-Cypriot approach has already received full support by Egypt and Israel, and indirectly the EU, as the latter is seeking increased security of energy supply options to counter Russian gas dominance.

The Turkish views are the opposite, as Turkish Energy Minister Fatih Dönmez reiterated that Ankara will keep to “the equitable principles and all relevant special circumstances” in delimiting maritime jurisdiction. Ankara also stated that it will not tolerate any shift in the Greek maritime border, but also demands the Turkish Cyprus (only recognized by Ankara) gets a part of the potential revenues of the offshore gas operations. President Erdogan is currently stepping up the pressure by involving the Turkish Navy to block offshore oil and gas exploration activities by the Greeks and Cypriots, while protecting Turkish offshore projects.

Turkey already has openly involved its Navy in a move to prevent or block Greek encroachments on the so-called Turkish borders. Last week, Turkish navy vessels have prevented a Greek navy vessel to block the operations of a Turkish seismic and drilling vessel in the eastern Mediterranean. Ankara’s strategy at present is that any Cypriot offshore operation needs to be coordinated with the Turkish Cypriot side. According to Ankara, the Turkish Cypriots have the right for an equal share to these offshore resources.

To up the ante, Turkish officials openly warned Greece the last weeks not to change anything in its maritime borders. The latter statement came just few days after that the Greek government indicated that it is assessing the options to extend its territorial waters to 12 miles to the west of the country. Since the end of the Ottoman Empire, and the establishment of the Turkey, Ankara and Athens have been at loggerheads on territorial water issues, as both are separated by the Aegean Sea.

Athens and Ankara have both repeatedly stated that military means will be used in case of a possible infringement by the other party. The most vocal in this is at present Ankara. Taking into account current Athens moves to extend its territorial waters in the Ionian Sea, which flanks the west coast of the country, a recipe for military confrontation is in the making. In a reaction, the Turkish government has stated that “it is not possible to tolerate steps where there is no bilateral agreement on the Aegean where the two countries have mutual shores”. Hami Aksoy, Turkish Foreign Ministry spokesman indicated that in a 1995 declaration of the Turkish parliament, the latter has been authorized to take action, not excluding military action, to safeguard Turkish interests. The Greek position is clear, as a signatory to the U.N. Convention of the Law of the Sea. Athens has stated that it can extend its territorial waters to 12 miles from its coast from the six miles at present.

The Turkish-Greek conundrum is looking like a Gordian Knott. The Greek-Turkish confrontation also is more complicated due to the role and position of Cyprus. Athens and Ankara have been threatening with military action over matters ranging from sea boundaries to air space jurisdiction and the ethnically-divided island. The latter issue, which has been a simmering but open wound for decades, now again has been pushed to the front. Since that (Greek) Cyprus has discovered possibly very large natural gas reserves offshore, Nicosia has issued licenses to international oil and gas majors for exploration.  At the same time, Turkish Cyprus (or Northern Cyprus) has stated that any offshore wealth also belongs to them, as partners in the establishment of the Cyprus republic in 1960.

In a reaction to the Cypriot offshore successes, combined with a trilateral cooperation with Israel and Egypt, Ankara has stepped up its own efforts to gain access to offshore energy reserves. The limited success shown in the Black Sea the last decades, combined with an exponentially growing economy, has forced Turkey not only to find additional supply sources for its gas (Russia, Central Asia, Qatar and Iran) but also in its own waters. In a move to speed this up, partly forced by the threat of an increased dependency on Russia, while Iran is blocked by US sanctions, Ankara has started on October 30, via Turkish drilling vessel Fatih, its first deep drilling project in Mediterranean Sea near Alanya district of Antalya.  At the same time the Turkish Minister of Energy and Natural Resources Fatih Dönmez stated that they are close to acquiring a second offshore drilling vessel. As indicated by the Turks, the official reasoning behind this operation is to reach overall energy independence.  The Fatih vessel is expected to drill two wells in the next year. The Turkish vessel, according to the same news source, will be accompanied throughout its activity by security forces. This Turkish move is significant, as it comes at the same time that US oil and gas major ExxonMobil will start its drilling of the first well within the (maritime) jurisdiction of Cyprus. The Exxon drilling wil be done for the “Delphini” target of block 10. Other international oil and gas majors, such as Italian company ENI and French counterpart Total, also will be doing the same around Cyprus very soon, this time on Block 6.

Cyprus has become a major focus point also of the European Union, as the latter is seeking to strengthen its overall security of energy supply, which currently still largely depends on pipeline gas imports from Russia. The current immense offshore gas reserve discoveries in the Eastern Mediterranean, especially Egypt (Zohr) and Israel, has attracted immense attention from Brussels. Since 2011, when US company Noble Energy announced the discovery of the Aphrodite field in Cyprus’s EEZ block 12, the European Union has taken notice. In 2013 appraisal drilling have confirmed natural gas reserves of more than 4.5 trillion cubic feet (tcf). With the Zohr offshore gas field discovery in Egypt, 2015, providing another 30 TC of natural gas, the region has become a hotspot. European interest is also high because the main offshore gas reserves are all close to the Cypriot EEZ.  Italian oil company ENI and French major Total also have been successful on the Calypso field in Block 6, Cyprus. The coming months, the success should be supported by another discovery on Block 10, which is being targeted by ExxonMobil. Based on assessments of ENI and Total, natural gas reserves in Calypso could exceed anywhere from 6 to 8 Tcf. ExxonMobil, a U.S. company, is planning to drill two wells in block 10 in the coming months.

To produce and export the Cypriot offshore gas reserves, several options currently are being discussed. Most promising at present is the in September signed Intergovernmental Agreement (IGA) between Egypt and Cyprus, in which Cypriot gas will be transported to Egypt, to be exported as LNG to European customers. Still, the decision has not yet made. Several other parties are still pushing for a so-called East Med gas pipeline, which is envisioned as a 2,000-kilometer pipeline crossing from Israel and Cyprus into Greece and Italy to link gas resources in the Mediterranean and bring them to Europe. A decision to go ahead with construction is expected sometime in 2019. This option however is already regarded to be very costly and commercially less attractive than the Egypt LNG option, especially if combined with Israeli gas exports to Egypt. To set up a Cypriot LNG liquefaction plant is also still in the air. Cyprus at present is also discussing to construct its own LNG import facility, with an expected cost of 300 million euros, to be built in Vassilikos.

The East Mediterranean, since years in the focus of oil and gas companies, due to its high prospectivity of offshore gas reserves, now has become a major military area too. The perceived military confrontation could reach soon a level of real and direct conflict. As the former head of the Cyprus Intelligence Service, Andreas Pentaras, stated to the press “if Turkey starts drilling off the coast of Cyprus it could lead to a serious crisis”.  According to his analysis, “Turkey has illegally appropriated most of the exclusive economic zone of Cyprus to the west of Paphos.” In particular, he stressed that Turkey appropriated about 30% of the area of blocks 4, 5, 6 and 7 of the Republic of Cyprus.  This possible showdown also has woken up the other countries in the region, especially Egypt and Israel.

The last months renewed military cooperation discussions have been held by Egypt, Israel, Cyprus and Greece. In October, Cypriot Defence Minister Savvas Angelides, while visiting Egypt, has discussed the expansion of military cooperation in the region as tensions bubble up over Cyprus’ East Med energy search. The talks included regional security and cooperation, and energy security in the Eastern Mediterranean. The last two years, several military memoranda of understanding have been signed on military cooperation, while trilateral military training and maneuvers have been discussed too, including the cooperation of Greece.

To complicate the matter even further, Turkish threats are also not taken lightly by Cairo and Tel Aviv, as their main offshore assets are close to the Cypriot reserve base. Israel has already opt for the set up of several Navy security groups, to secure its natural gas rigs. Officially, Israeli defense sources are pointing at Hezbollah or Hamas threats to the offshore projects, but Turkish military movements are included. Israel’s Leviathan gas field has currently the main attention. Since the start of Leviathan, Israel’s navy and army have been heavily involved, even rejecting a floating option for production, claiming that production from Leviathan is strategic and needs heavy protection. At least until Navy boats ordered from Germany arrive, it’s too dangerous to leave the facility exposed so far from the shore.  The same discussions are to be expected for the Karish-Tanin field (10% of size of Leviathan), as it is close to the Lebanese border, and about 100 kilometers from the Israeli shore. It is expected to start producing gas in three to four years.  In all of these cases no Turkish threats have been mentioned. Turkey is still a politically sensitive issue in Israeli politics, it is easier to address Hezbollah, Iran or Hamas. Ankara’s strategies are being closely assessed and taken into account.  Israel’s navy has also placed an $500 million order for 4 German corvette’s to protect its drilling platforms far from the coast.  The deal with the Germans, signed in 2015, was based on defense measures against sea-borne or rocket threats to gas facilities from Hezbollah guerrillas in Lebanon and Hamas militants in Gaza — related to their being 120 kilometers offshore.

On the other side of the maritime border between Israel and Lebanon, security is also a real issue. Already at the beginning of 2018, when Lebanon signed off its offshore oil and gas contracts, sources indicated that the unsolved border issues with Israel, and the position of Hezbollah and Iran in the country pose a potential threat. The latter has also been indicated by the consortium French Total, Italian ENI and Russian Novatek, which signed already in 2017.  As one of the first wells to be drilled is on bloc 9, partly situated in an 860 square kilometers stretch of sea that is subject to a border dispute with Israel, a crisis is always on the horizon. At the beginning of 2018, Israeli Defence Minister Avigdor Lieberman described Lebanon’s offshore oil and gas exploration tender process as “highly provocative”. Sources have indicated that Lebanon needs 10 to 15 extra warships.

The Egyptian involvement is clear. Looking at the ongoing large scale investments in offshore gas, based on the immense success of the Zohr offshore gas field (ENI), and a potential elephant field coming (Noor), Egypt’s Navy is heavily involved to secure this source of revenue. Cairo also keeps an eye on Turkey, as the current Egyptian government is not amused about Turkish president Erdogan’s support for the Muslim Brotherhood, Palestinian terrorist movement Hamas, and potential cooperation with Iran (and Hezbollah). Egyptian military officials have clearly indicated that Egypt’s military will be taking part in any operation to quell a threat to offshore energy operation in the East Mediterranean. Full military coordination is already being implemented with Israel, Cyprus and Greece.

Even that all signs are on red, as a military confrontation is looming, some shimmers of hope still exist. The last days, Cyprus has indicated that it would be open for a discussion with Turkey with regards to offshore oil and gas projects.  At the 14th Cyprus Summit on November 2 in Nicosia Cypriot President Anastasiades said that more energy needs to be put into the Cyprus (Greece) – Turkey conflict. To set up a functional and commercially attractive regional cooperation, Turkey should be part of this. Cypriot Foreign Minister Nicos Christodoulides has called upon Turkey to join the other East Med countries in this process. He indicated that Nicosia would be happy to engage with Turkey based on international law and UNCLOS, the UN law of the seas. The door is still open, but all depends on Ankara’s actions.

As warning to Ankara, Michael Oren, Israeli Deputy Minister in the Prime Minister’s office, at the same conference, stated that Cyprus, Greece, Egypt and Israel have set up a strong energy, political and security cooperation. The Israeli official reiterated that Israel is fully supportive of Cyprus’ rights to explore and exploit its EEZ and calls on Turkey to avoid any actions that interfere with this. Tel Aviv again indicated that Israel will support Greece and Cyprus in case of a Turkish threat.  According to US officials, Washington is fully behind the regional cooperation. More US military involvement in the region is expected soon.

The coming months, an international strategy, should be put in place to reach a solution and to quell the potential of war. By integrating the strategic position of Cyprus in a regional security alliance, as presented via NATO already, possible openings can be created to resolve one of the most dangerous 20th Century conflicts. In contrast to some other security of energy or security of energy supply issues, the East Mediterranean presents the prime example of the old rule “Energy = politics =conflict). To solve this, while addressing a much more important issue, Europe’s security of energy supply and economic stability, is a necessity. Without a full scale EU-NATO coordinated approach to the East Mediterranean players (Cyprus-Greece-Israel-Egypt and Turkey), a doomsday scenario could become reality. Taking advantage of the current intraregional cooperation between European Southern countries (Greece-Cyprus) and Levant powers Egypt-Israel (both associates of EU/NATO), a regional conflict between NATO partners, at a time of growing instability in MENA, can be avoided.