{ "id": "IN10864", "type": "CRS Insight", "typeId": "INSIGHTS", "number": "IN10864", "active": false, "source": "EveryCRSReport.com", "versions": [ { "source": "EveryCRSReport.com", "id": 601877, "date": "2018-03-01", "retrieved": "2020-01-02T16:35:50.370521", "title": "Tensions in the Eastern Mediterranean Focus on the Politics of Energy", "summary": "Cypriot (Greek and Turkish) interest in energy exploration in the Eastern Mediterranean began in 1998 after Noble Energy, a Texas-based energy company, discovered a large natural gas deposit in the Levant Basin. The location is in waters considered part of Israel\u2019s exclusive economic zone (EEZ) but bordering parts of the Republic of Cyprus\u2019s (RoC\u2019s) EEZ. In 2007, the RoC granted Noble Energy a license to explore for gas in an area identified as block 12, or the \u201cAphrodite\u201d field within its EEZ. In 2011, Noble Energy announced the discovery of natural gas in block 12. Subsequently, the RoC held three more rounds of licensing for additional exploration in its other blocks (see Figure 1). \nAlthough no Cypriot gas has yet been extracted and none is expected to be until perhaps 2020 or later, the RoC\u2019s strategy is to combine its gas reserves with those of Israel, and perhaps with that of a new discovery in Egyptian waters, to create a new Eastern Mediterranean energy supply market. Cyprus does not use gas as a domestic energy source, but the Greek Cypriots have examined the feasibility and cost of developing a pipeline terminal and liquefied natural gas facility in southern Cyprus for both domestic consumption and export. The European Union (EU) is financially supporting the construction of a pipeline connecting Israeli, Egyptian, and Cypriot gas deposits with Greece to bring additional gas to southern Europe as part of the EU\u2019s supply-diversification strategy. Others have suggested that a pipeline connecting Israeli and Cypriot gas to Turkey for transport to Europe would be more economical and less technologically challenging.\nMany observers were initially hopeful that the energy issue would help propel Cyprus\u2019s long-stalled unification negotiations to a conclusion as both Greek and Turkish Cypriots realized the potential economic benefits to a unified island. However, the energy issue has become a sticking point in the negotiations. It resulted in a previous suspension of the talks and has contributed to tensions between Turkey and the Greek Cypriots. \nThe United States and the EU have long supported the RoC\u2019s right to explore for energy in its EEZ, but both have stated their hope that the economic benefits of such exploration could eventually be shared by everyone on the island. \nOpposition from Turkish Cypriots and Turkey\nTurkish Cypriots and Turkey opposed the Greek Cypriots\u2019 right to conduct unilateral energy exploration off the island\u2019s coasts. Neither Turkey nor the Turkish Cypriots recognize the RoC, and both maintain that because the Greek Cypriots do not represent the whole island, they cannot conclude agreements, such as the delineation of an EEZ, or issue licenses for the exploration of natural resources without the Turkish Cypriots\u2019 concurrence or participation. \nTurkish Cypriots have maintained that no decisions on the future use of any gas should progress until a comprehensive settlement of the island\u2019s division has been reached between the Greek and Turkish Cypriots, including guarantees that the exploration\u2019s economic benefits will be shared between the two communities. The Greek Cypriots, in turn, have insisted that all revenues derived from any resources would be jointly managed and shared with all Cypriots under a federal entity anticipated as part of a final settlement of the island\u2019s status. They support this assertion by referring to past \u201cunderstandings\u201d reached during the unification negotiations between previous Greek and Turkish Cypriot leaders. \nFigure 1. Offshore Exploration Licenses: Republic of Cyprus\n/\nSource: Republic of Cyprus Ministry of Foreign Affairs.\nSince 2007, Ankara has warned the Greek Cypriots that Turkey would not stand idly by and let gas exploration and exploitation go forward without the Turkish Cypriots\u2019 concurrence; Turkey also has periodically threatened to take strong action against the Greek Cypriots if they persisted. In 2011, the Turkish Cypriots and Turkey signed a Continental Shelf Delimitation Agreement declaring EEZs of their own. Effectively, this agreement claims that most of the EEZ claimed by the RoC also belongs to the Turkish Cypriots, including blocks 1, 2, and 3 as well as blocks 8, 9, 12, and 13 (see Figure 1). Ankara itself has laid claim to parts of blocks 1, 4, 5, 6, and 7, asserting that the areas in question form part of Turkey\u2019s continental shelf. In 2016 and 2017, Turkey launched its own seismic studies for energy deposits off the coast of Cyprus. Furthermore, Turkey, in an apparent signal of its commitment to protect the Turkish Cypriots\u2019 rights, has regularly conducted naval exercises in international waters in and around the areas bordering Cypriot drilling sites. \nTensions Rise\nIn early January 2018, the Italian energy company ENI conducted exploratory drilling in block 6, reporting potentially significant deposits of gas. In early February 2018, as the ENI drilling vessel, Saipem 12,000, began traveling from block 6 to block 3 to conduct additional drilling, several Turkish warships appeared in the area (in international waters) and blocked the Saipem from moving. The RoC protested that Turkey\u2019s show of military force did not create an atmosphere for negotiation. The EU called for Ankara to show restraint. ENI, after several days, withdrew its drilling vessel from Cypriot waters. Turkey\u2019s action has raised the question of whether Ankara will take similar actions against future drilling operations, including those of Exxon-Mobil.\nIncreased tensions over the energy issue likely have placed the resumption of the currently suspended unification negotiations between Greek and Turkish Cypriots on indefinite hold. Some observers have questioned the timing of a Turkish Cypriot demand for joint decisionmaking on energy as a precondition for restarting the talks. Additionally, some believe that Turkey\u2019s naval actions to slow the RoC\u2019s energy development efforts are part of a strategy to force the Greek Cypriots to restart the talks under more favorable conditions for the Turkish Cypriots. Others contend that Turkey\u2019s actions are designed to illuminate what Ankara believes are Greek Cypriot intentions with regard to sharing power, authority, and wealth with the Turkish Cypriots. If Turkey\u2019s efforts are successful, Ankara may try to justify an abandonment of unification negotiations in favor of a two-state solution.", "type": "CRS Insight", "typeId": "INSIGHTS", "active": false, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/IN10864", "sha1": "e14ae338a6112eeab5176ea06a187aeca23c7f9c", "filename": "files/20180301_IN10864_e14ae338a6112eeab5176ea06a187aeca23c7f9c.html", "images": { "/products/Getimages/?directory=IN/ASPX/IN10864_files&id=/0.png": "files/20180301_IN10864_images_f1a236deb60fc97639c91ea74faf5b1e79bdce5e.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/IN10864", "sha1": "9e62e66f7c22818236b2bf6d4a908e6e9edcf9e2", "filename": "files/20180301_IN10864_9e62e66f7c22818236b2bf6d4a908e6e9edcf9e2.pdf", "images": {} } ], "topics": [] } ], "topics": [ "CRS Insights", "Foreign Affairs" ] }