[box] In this three-part series, Necdet Pamir looks at the changing dynamics of the relationship between the energy sector and geopolitics in and around Cyprus and Eastern Mediterranean[/box]

Problems with Exclusive Economic Zones (EEZ)

All the littoral states of the Eastern Mediterranean do not currently have a mutual agreement in place regarding their Exclusive Economic Zones (EEZ). There are a few agreements signed between other countries, however Turkey has not recognized any of thee yet. And because of this, we are dealing with actual states of affairs, and fait accompli.

The concept of EEZ were designed by the 1982 United Nations Maritime Law Convention. What EEZ is basically, the right given to a state to have independence in and under the seabed for 200 nautical miles (approximately 370 kilometers) starting from the coast and going towards the open sea.

However, when it so happens that the 200 nautical miles from the coastline of a state intersects with the 200-mile area of another state, as in the Black Sea, the Aegean and the Mediterranean, the two (or more) riparian states are expected to reach an agreement between themselves. No such agreement is in place for Turkey with regards to Eastern Mediterranean. And this causes multiple problems when there is exploration and drilling activities for hydrocarbon in and around Cyprus.

Turkey regards the EEZ in the map below as its EEZ and stands strongly against expropriation attempts in these areas.

The source of all unjust and illegal developments in the region is the consequence of EU’s illegal acceptance of GCASC as a member and sole ruling state of the island of Cyprus despite the existence of TRNC. EU has been supporting GCASC and Greece in all their unjust claims regarding their EEZs.

What Greece and GCASC are trying to do basically, is to confirm EEZ status to even islands such as Meis Island in order to cut Turkey’s access to open seas, and limit Turkey’s EEZ to Iskenderun Bay. The EU supports and encourages these actions openly, while the US seems to be providing their backing behind the scenes.

The truth, however, is that the riches that exist on and offshore Cyprus island as well as on and under its territorial waters belong to both nations equally. Despite this, GCASC is trying to use the gas reserves around Aphrodite field that was discovered in the 12th bloc unilaterally. Furthermore, they are using this as a trump card in their negotiations with the Turkish side in the negotiation process. While the Greek side talks about a “solution process”, they have conducted three tenders to international companies to explore the regions around the island, again unilaterally without taking the approval of the Turkish side. Their ultimate aim is not to simply create a fait accompli and grab the ownership of all hydrocarbon resources in and around the island. They are also looking to get the support of giant international companies and the States behind them. Their latest tenders were already awarded to ExxonMobil (USA), TOTAL (French), ENI (Italian), Kogas (S. Korea), as well as Qatar Petroleum -from Turkey’s favorite Gulf state, Qatar. It is ironic however that Turkey has not confronted Qatar, its closest “ally” in the recent years about their involvement.

Turkey has three main objections against unlawful practices in the region:

  • The unilateral recognition of GCASC as the sole Cyprus state,
  • GCASC’s proprietary determination of maritime jurisdiction, and issuance of licenses to international companies,
  • The conflict of Turkey’s claims on EEZ in Eastern Mediterranean with GCASC’s in multiple regions

Current actions of GCASC (hydrocarbon exploration, exports, etc.) are in direct conflict with international laws, and they violate the rights of TRNC citizens. The sources discovered in recent explorations belong to both nations, and it is up to both of them to decide on how to proceed.

TRNC’s objections, on the other hand, can be summarized as follows:

  • “GCASC does not have the right or the authority to sign EEZ agreements with riparian states. They have to act together with TRNC.” Rauf Denktas, 2011
  • “Turkish Cypriots who are given equal political rights to the Greeks under the 1960 Cyprus Republic, have also equal rights to Cyprus’ natural resources, its terrestrial and nautical territories. It is a lapse of judgement on the EU’s part to have granted the Greeks unilaterally as the only nation to represent the island.” M. Ali Talat, 2007
  • Greek Cypriot side has to find a way to agree with the Turkish side regarding the handling of natural gas reserves in and around the island -even if they are not ready for a full-scale solution. Otherwise, the Turkish side may just as well act in unison with Turkey in undertaking similar endeavors. The drilling vessel Turkey purchased recently will be used for explorations since the riches of the island lawfully belong to both parties. They don’t belong to the Greeks alone.” Mustafa Akinci, President of TRNC, 2018

TPAO indeed purchased a deep-sea drilling vessel called DeepSea Metro 2 from South Korea at the end of last year and renamed it Fatih. The vessel is currently in Antalya port awaiting instructions to drill the offshore prospects around Alanya.

Turkey and the Turkish Republic of Northern Cyprus has, so far, made three moves against the unjust acts taking place in Eastern Mediterranean:

  • Whenever there is an incursion taking place in the regions that Turkish government has licensed to TPAO, Turkey has acted to halt it, even if it takes military showdown.
  • In cases of incursions taking place in regions that TRNC has licensed TPAO, similar military actions are being taken. The last example of it was when ENI’s Saipem 1200 drilling platform was moving towards Cuttlefish prospect in the region called 3rd
  • Whenever the Greeks act as if they have jurisdiction on the whole island of Cyprus, and explorations are being undertaken in regions that TPAO is licensed by either Turkey or TRNC, both countries make the diplomatic efforts to assert their joint ownership of hydrocarbon resources.

The map above (released by Stratfor and modified by the author) shows the regions that Turkey has licensed to TPAO in white labels, the regions that TRNC has licensed to TPAO in blue lettering from A to G, and the regions that GCASC has licensed in orange numbers from 1 to 13. Calypso exploration falls outside the licenses of Turkish side. The 3rd block where Saipem 12000 was headed, however, was stopped by Turkish Navy’s NAVTEX military exercise since it is in direct conflict with TRNC’s license to TPAO known as the F block.

While Saipem 12000 was moving towards the 3rd block as labelled by the Greek Cypriots (falls into the Block F as labelled by TRNC), Turkish foreign ministry made the following announcement:

“GCASC has been continuing unilateral activities of hydrocarbon exploration in Eastern Mediterranean, effectively stepping over the rights of Turkish Cypriots over the natural resources of the island. We have been observing that GCASC wishes to continue their unlawful activities in their so-called EEZ’s 3rd parcel.

“… We wish to make it known that we will not tolerate -let alone support, the activities of international companies acting in unison with GCASC in hydrocarbon exploration, and that these activities are big deterrents in a solution process for Cyprus.”

How to Proceed Forward?

Admittedly, GCASC has been playing this game much more effectively than the TRNC, thanks to continued support from the EU and the US. Russia and Israel are participating in joint naval exercises with Greece and GCASC. Russia is relatively threading waters so as not to be seen on any of the sides of the conflict between Turkey and Greece. Egypt, under Sisi’s rule, seems to have secured its place with the Greeks and GCASC. Other riparian states such as Syria and Lebanon also appear to be on the Greek side -thanks to our government’s negative foreign policy towards them. It seems unlikely that the international sentiment will turn towards us as long as the same policies are being implemented.

Greek Cypriots have been expertly using the local and international media to establish a certain psychological pressure on TRNC. Most conventions and meetings about Cyprus and Eastern Mediterranean are organized by Greek and GCASC governments and think-tanks. The exaggeration of the reserves found in Aphrodite field is part of this scheme. The initial predictions of 198 billion cubic meters of reserves have been downgraded in half to 102 billion cubic meters a year later. This amount of natural gas would easily cover Cyprus’ natural gas demand for years, but it is certainly below any meaningful export concerns that will bypass Turkey and TRNC. Despite this fact, GCASC acts as if they can lay down a pipeline 2000 meters below sea level that will export the gas over to Greece, or else set up LNG terminals, which is a fantasy at best. As well known in energy circles, any amount less than 250 billion cubic meters would be economically unfeasible for the establishment of an LNG terminal, and also that at least two terminals are needed for such projects. What the Turkish side is lacking, is a proper technical, economic, legal and political policy despite all the recommendations done to the government.

The ongoing negotiations in Cyprus seem to have reached a deadlock in land appropriation matters. However, there are strategic and vital matters to consider for Turkish Cypriots that are more urgent, such as guarantors, two state solution, two parliaments, and the authority of the Vice President to veto, etc. The fait accompli in natural gas carried out by the Greeks is, similarly, is a case of putting the carrot before the horse situation. The real solution to the problem is to recognize the existence and application of equal rights and jurisdictions in hydrocarbon exploration, field advancement, marketing and exporting of resources. Such an approach will not only solve the immediate issue but will also provide a solid base for wider negotiations for other issues.

What TRNC and Turkey should do is to gather able teams and set up a structure that will focus on all aspects including technical, economic, legal and political. Such a structure can be formed with the help of academia as well as competent personnel derived from public and private sectors to culminate in an Energy Policies Center located in TRNC. We must also work towards establishing an infrastructure that will amplify our demands internationally.

Turkey also has to reconsider the structure of TPAO and bring it back to its original vertically-integrated company structure. BOTAS should re-merge with TPAO to form the backbone of Turkey’s national oil and gas company. All major oil and gas companies in the world are vertically integrated: BP, Shell, Exxon, Rosneft, Gazprom, PDVSA, CNOOC, Petrobras, Aramco, NIOC, etc. However ironically, Turkey’s TPAO and BOTAS, on the other hand, have been recently transferred to a public fund and are both ongoing privatization. Their workforce has been significantly reduced and experienced staff forced to retire. The purchasing of seismic exploration vessel such as Barbaros Hayrettin Pasa and drilling vessel Fatih may seem like temporary solutions against Turkey’s isolation in the Mediterranean, but what we lack is seasoned offshore exploration and drilling as well as local and loyal technical personnel that can analyze the findings and put them to good use for the benefit of the country. The merging of BOTAS and TPAO under a vertical integrated stronger company must be Turkey’s top priority. Refining and distribution operations should also be under the coverage of the new national company. Through such a re-organization, we will be creating many job opportunities for young engineers, information technology professionals and economists. TPAO is our alma mater. It must resume its original mission as soon as possible.

Read Part II or Back to Part I