Thursday, August 30, 2012

In Cyprus, Race for Natural Gas Adds to Tensions

SINIRUSTU, Cyprus ? The island of Cyprus, split by one of Europe?s most intractable ethnic conflicts, is now the focus of another contest, over who will control the significant natural gas wealth found in nearby waters. The question is whether the gas discovery will become an incentive for the two sides to cooperate, or yet another obstacle to reunification of the island.

The early indications are not promising. The two halves of the island ? the mainly Turkish-speaking north, occupied by Turkey since an invasion 38 years ago, and the internationally recognized, mainly Greek-speaking Republic of Cyprus in the south ? are racing this summer to see who can tap the gas first.

This competition adds a new layer of potential instability along Europe?s southern fringe, where the euro crisis has sown political and economic turmoil and relations between Greece and Turkey, and Turkey and Israel, are already fraught with tensions.

A lot of energy is at stake. Beneath the seabed of the Levant Basin near Cyprus is an estimated 122 trillion cubic feet of gas, about as much as the world consumes in a year, according to the United States Geological Survey. The northern part of the basin lies in Cypriot waters, with much of the rest in Israeli or Lebanese waters.

An American company, Noble Energy, based in Houston, is leading the offshore drilling in the region and has announced finds of 35 trillion cubic feet, with about 20 percent of it in Cypriot waters. Noble is working with Israeli partners under license from Greek Cypriot leaders, many of whom regard the undersea area as theirs to exploit as they please, at least for now.

But the northern Cypriots say the drilling is illegal because it does not take into account their competing claims to the island and its surrounding waters. They have called on energy companies to halt drilling, and on Cyprus to stop issuing licenses.

Turkey, too, is unhappy with the drilling and has threatened to send its navy if necessary. To underscore their displeasure, the Turks have erected a large oil and gas exploration rig on a hill above Sinirustu, a village near the north coast of Cyprus, and have festooned it with flags.

?Maybe war could explode again here,? said Fikret Akan, 29, a Turkish-speaking resident of the village who works at a fuel depot in a nearby town. ?Turkey, Israel and the United States all could start fighting over these resources.?

The United Nations, which supervises a buffer zone between the north and south, has hailed the gas discoveries as a way of generating wealth that could finance a reunification of Cyprus. But Mr. Akan?s fears about a greater conflict may not be entirely unfounded.

Even before any gas has been produced, the discoveries have created ?risks, big risks, as well as a myriad of legal issues,? Richard L. Morningstar said in March when he was the United States special envoy for Eurasian energy, adding that the issues ?go beyond Cyprus, they go beyond Israel, they go beyond Greece ? they affect the whole region.?

This year, the United States established its first regional headquarters for a new Bureau of Energy Resources in Cyprus. Although it, too, has urged a fair distribution of resources between the halves, Washington has strongly supported the right of the recognized government of Cyprus, a member of the European Union, to drill in its waters.

That forceful backing may have reinforced the Greek Cypriot leaders? unwillingness to divide oil and gas wealth with the Turkish Cypriots, at least for now. ?Don?t speak about sharing,? Neoklis Sylikiotis, the Cypriot commerce minister, said during a recent interview. Only after the division of the island is resolved can the revenue be shared, he said.

As attitudes harden, the northerners have mapped out blocks of the eastern Mediterranean for licensing that roughly overlap waters claimed by the Cyprus government. The Turkish government has acknowledged that one vessel chartered by the Turkish Petroleum Corporation had made seismic surveys on behalf of northern Cyprus in waters that overlap Cypriot claims. And the northerners have begun their own onshore explorations, starting in Sinirustu.

Greek Cypriot officials like Mr. Sylikiotis dismiss the exploratory drilling in Sinirustu ? which they call by its Greek name, Syngrasis ? as nothing more than a theatrical stunt. But the drilling work has gone ahead at full speed this summer. A heady, sulfurous odor created by the mixture of drilling fluids and mud hung in the air over the village despite a warm breeze.

Source: http://www.nytimes.com/2012/08/31/world/europe/in-cyprus-race-for-natural-gas-adds-to-tensions.html?partner=rss&emc=rss

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