Author Archives: erpic-manager
Ahmet Davutoglu: A New Era in Turkey’s Foreign Policy? A Perspective from Cyprus
Dr. Erato Kozakou-Marcoullis (Ambassador a.h.)
Former Minister of Foreign Affairs of the Republic of Cyprus
28 July 2009
When Chris Pelaghias asked me a month ago to choose a subject for presentation at the next roundtable of ERPIC, I immediately responded that I would like to speak on Ahmet Davutoglu’s foreign policy approach and agenda, as it emerges from his theory of “strategic depth” and from the policies pursued by the Justice and Development Party since it came to power nearly seven years ago. This is because in recent months I have been studying more thoroughly Turkey’s foreign policy and especially the main theorist and architect of Turkey’s evolving foreign priorities, Ahmet Davutoglu, the current foreign minister of Turkey. It has always been my firm conviction that studying your adversary’s policies and objectives, a country may be in a better position to analyze and evaluate all the dimensions of its strengths and weaknesses as well as any possible prospects for future transformation of their relations. Studying Turkey has always been fascinating, especially studying Turkey’s foreign policy and diplomacy which I consider the most successful asset of this complex and multi-dimensional country.
The British, the Mediterranean, and the Anglo-Cypriot Relationship: What Went Wrong and Can It Be Put Back?
The British, the Mediterranean, and the Anglo-Cypriot Relationship: What Went Wrong and Can It Be Put Back?
Professor, University of London
‘For Great Britain’ the distinguished diplomatic historian E.H. Carr said in a lecture during 1937 ‘the Mediterranean problem is, in its final analysis, a problem of the way in, the way through, and the way out.
If you consider the steps by which Great Britain be came a Mediterranean power, you will find that her policy has always been dominated by this question of entrances and exits’. Carr was writing in the after-blast of the crisis over Abyssinia, in its strategic aspect essentially a Mediterranean crisis. If you read the history of most Mediterranean countries during the 1930s, Abyssinia crops up prominently. Books on Cyprus largely ignore it. The introspectiveness of Cypriot affairs – both of the Cypriots themselves, and the British in Cyprus – is a theme I will come back to.
The ambivalence of Cyprus in British strategic assessments from 1878 onwards lies in the fact that Cyprus is not, in any very precise sense, on the way in, through or out of anywhere in the Mediterranean. It is not an opening such as Gibraltar, the Straits of Constantinople, Alexandria/Suez, or indeed Alexandretta, nor does it have the centrally commanding position of Malta. ‘Cyprus I should not propose to consider’ a senior Admiralty planner sniffily remarked in 1898 when considering where the British Mediterranean Fleet should be based at the outbreak of any war ‘as it has no harbours and no strategic value’. Such dismissiveness on the part of British military planners could be endlessly quoted.
British Strategy on Cyprus; Past and Present
Professor, University of Cambridge
Ever since 1878, when Britain took control of Cyprus from the Ottoman Empire, British politicians and commentators have looked for ways in which the island might be employed to influence events in the Balkans and Middle East, first as a naval and military base, and later as an air base, a broadcasting station and an Intelligence gathering post. How far any of these ambitions could be realised depended crucially on whether decision makers understood political developments in the region but secondly on whether British agents in the area could put their decisions into effect. Analyses of great power intervention in the Third World are divided between those who believe that policies are primarily decided on Machiavellian grounds of ruthless interest and those who believe that a mixture of interest, good intentions and incompetence generally lies at the root of policy. This essay falls firmly into the latter group; it suggests that British policies towards the region have failed when their Intelligence has been poor and politicians have misunderstood the tide of events and thus their ability to influence them.
The Russian Response to Western Strategy
Dr. Nadia Arbatova
Department on European Political Studies,
Institute for World Economy and International Relations (IMEMO),
Russian Academy of Sciences, Moscow, Russia
The recent Caucasus crisis has become a culmination of the Russia-West security differences and raised fears of a new Cold War. Given that “Cold War” is not so much a scientific but rather a journalistic term; any serious confrontation between Russia and the West can be labeled as “a new Cold War”. It is often used to describe any heightened tension between states, but this interpretation does not indicate any starting point from which the rise in tension can be measured and its probable consequences and dangers assessed. As we know from our recent history, the Cold War was a period of conflict and competition between the US and the Soviet Union that began in the 1940s and lasted until the early 1990s. This period can be characterized by several distinguishing features which are in fact missing in the current situation. Nonetheless, the last decade of mutual dissatisfaction and mistrust has deeply affected the Russia-West relations. After the end of bipolarity these relations passed through several stages beginning with euphoria in early 90s and ending with the recent flare-up in tensions between Russia and the United States during the Caucasus crisis. Why did it go wrong? And what should be done to avoid a new confrontation, whatever the name, between Russia on the one side and the United States, NATO and the European Union on the other? What are the possible scenarios in the Russia-West relations?
Dr. William Mallinson
Ionian University, Greece
This presentation was delivered during the roundtable event which took place in Nicosia on the 20th of April 2010.
Ending the Israeli Occupation
General Delegate of Palestine in Cyprus
When addressing this situation, it is necessary to start the analysis from the beginning of the negotiations. As you are probably aware, we started to negotiate with Israel in 1993, after the signing of the Oslo agreement. Since then, and for almost seventeen years now, the negotiations with Israel have been in progress, having made, however, very little progress in establishing a state for Palestine.
This presentation was delivered during the roundtable event which took place in Nicosia on the 8th of June 2010.
The Rise of Turkey and the Cyprus Problem
Dr Andrestinos N. Papadopoulos (Ambassador a.h.)
The purpose of this presentation is to offer an analysis of recent developments concerning Turkish foreign policy with a view to encouraging your comments, rather than your questions. Your interpretation of the moves of the Turkish diplomacy will be of value to all of us, and will certainly help us to gain a better understanding of the situation. I intend to refer to the new strategy of Turkey, and to some of the changes that have occurred affecting the Cyprus problem, and also to the positive and negative aspects of this strategy, before reaching my conclusions.
This presentation was delievered during the roundtable event, which took place in Nicosia on the 26th June 2010.
Dr. Yiannos Charalambides
Oil and gas constitute sources of energy and, by extension, power. However, the question is whether oil and gas constitute raw materials, utilized only for prosperity, development and stability or they may turn into a source of friction and thereby become fuel for conflict. There is already reliable and concrete evidence, stemming from relevant research, showing that the Southeastern Mediterranean Sea lies on huge reserves of gas and probably oil. Israel and Cyprus undertook their own surveys within their respective Exclusive Economic Zones (Reuters 2011, Daljecom 2009)1. The first phase of these explorations was successfully accomplished. Both countries announced their intention to exploit their natural resources, especially in the neighboring “block 12”, “Leviathan” and “Tamar”2 (Noble Energy 2011, LNG World News 2011, Barkat 2010, Shemer 2011, Cooper 2010, Oil in Israel 2009)3. In this respect, a new geopolitical environment seems to have come into being. Currently, the relevant question is whether there is fertile ground for the shaping of a new geopolitical map through the establishment of a coalition between Israel and Cyprus, including, probably, other states. South Eastern Mediterranean Sea and the Middle East constitute sensitive geostrategic and geo-economic areas where conflicting and converging national interests are met. Israel is not the only regional power. Turkey has always intended to play a leading regional role. Therefore, a new geopolitical evolution should be seen through the lens of the Turkish foreign policy and national interests. Such a foreign policy is in line with the Turkish strategic goal, which predicts the consolidation of Ankara’s dominant presence in a regional level.
Total Sets New Drill Date for First Offshore Cyprus Well
France’s Total is now expected to drill its first exploration well offshore Cyprus in June or July of this year, a source close to the energy industry on the island told this correspondent recently. Last October, when it signed a service contract to use facilities in Limassol port, the company said it intended to spud the well in April this year. This was some eight months behind Total’s original plan.
Due to complications caused by uncertainty over what port on the island Total might use as an onshore logistics base, the Paris-based firm has had to postpone its first well twice. It had originally planned to drill in Block 11 in September 2016, but that plan was interrupted when a license for access to the port in Larnaca was not renewed by the municipal council there. After taking steps to operate out of the island’s main port in Limassol and launch the well in April 2017, a service agreement signed with a local oil service company was found to be in violation of the government’s contract for management of Limassol port by a consortium headed by Dubai’s DP World and including local partners.
The Cypriot government had signed the contract with DP World and partners earlier in the year, but had apparently overlooked a clause that extended full management of the port to the private contractor, including onshore services used during the course of offshore drilling.
The obstacles with working out of Limassol were overcome through negotiations at the end of December, but the length of negotiations have forced Total to delay hiring a rig and finalizing HSE (health, safety, environment) requirements, the source said.
“A rig contract should be awarded by the end of this week. With the rig secured, Total will award all the other contracts necessary for the drilling campaign,” the source said, adding: “As one might imagine, it was a challenge to keep the tendering process alive and valid during the three months’ interruption.”
Total must now compile the HSE requirements, which must be submitted to the various competent authorities in the Cypriot government three months prior to the start of drilling. Once it gets underway, the well will take about two months to complete, the source said.
Total, which was awarded Blocks 10 and 11 in February 2013, will drill the well, which has been identified by the Cypriot government with the name Onisiforos, in a geological stratum described as a carbonite platform that could be an extension of the geology in which Egypt’s giant Zohr gas field was discovered by Eni in August 2015.
The Zohr field, which has a gas reservoir of 30 trillion cubic feet, lies in the Shorouk Block only 6 kilometers from the Cyprus-Egypt maritime border. Zohr’s discovery prompted the Cypriot government to launch its third licensing round early last year and in December it announced the preferred bidders for the three blocks tendered. ExxonMobil and partner Qatar Petroleum were named for Block 10, Eni was awarded Block 8, and a Total/Eni partnership were awarded Block 6.
Although awarded Block 10 in February 2013, Total relinquished the block in early 2015 before Zohr was discovered because it could not find a low-risk target. Total requested from the Cypriot government after the Zohr discovery that it retrieve the block, but Nicosia decided that the block had to be retendered. In the 2016 bidding round, Total bid on Block 10, but lost out to the US/Qatari partnership.
The second half of 2017 promises to be an interesting time in the Cyprus offshore. Total should finish its well by September and Eni is expected to return during the second half of the year to resume a drilling program that it suspended in the autumn of 2014 after it drilled two dry holes in Block 9, for which it was awarded a license, along with Blocks 2 and 3, in January 2013. Should Eni be awarded Block 8, it will have a sizeable portion of exploration area in the eastern region of the Cyprus Exclusive Economic Zone (EEZ).
Only four wells have been drilled in the Cyprus EEZ: two dry holes by Eni, and the Aphrodite discovery and appraisal wells by US explorer Noble Energy in Block 12. Discovered in December 2011, the Aphrodite fields holds a gas resource estimated at 4.5 trillion cubic feet, but plans to monetize the gas have yet to take shape. Negotiations have been carried out with Egypt to send the gas there by subsea pipeline with the intention of processing it into LNG at Shell’s idle Idku facility for export to foreign markets. Talks on this scheme have been underway for some time, but there appears to be little headway. Some analysts think that Aphrodite’s future is directly linked to that of the nearby giant Leviathan field in the Israeli offshore.
Separately, EU energy officials and representatives of the energy ministries of Cyprus, Greece, Italy and Israel, heard last week in Brussels that a proposed subsea pipeline from the East Mediterranean to Greece and Italy was technically feasible and economically viable at a cost of $6 billion.
The project is being promoted by IGI Poseidon [Interconnector-Greece-Italy], a joint venture between Greece’s natural gas company DEPA and Italy’s Edison. The pipeline, which is targeted for operation in 2025, would transport 16 billion cubic meters of gas per year from the East Mediterranean to Greece and Italy through a combination of subsea and onshore pipelines stretching some 2,000 kilometers. A member of the IGI Poseidon team has told this correspondent that the company hope to see the pipeline in operation in 2025.
The Brussels presentation, carried out by Edison, was in preparation of a meeting that is due to take place in Israel in May that will include EU Commissioner for Energy Miguel Arias Canete and the energy ministers of the four countries briefed at EU headquarters. IGI Poseidon argues that the pipeline would be a practical way to export natural gas from the region directly to the European market. It takes into consideration that more gas would need to be discovered in the East Mediterranean in order to supply adequate gas volumes for the pipeline’s successful operation.
Phase 1 development of Israeli and Cypriot gas resources is expected to target local regional markets as primary customers. Exports beyond the region would be part of Phase 2 development, except in the case of another major discovery on the scale of Egypt’s Zohr field. That is exactly what Total is hoping for.
A version of this story was published in Euroil/NewsBase.
Lebanon Returns to East Mediterranean Gas Game
Lebanon’s new government dealt the country back into the East Mediterranean natural gas exploration game on January 4 when it approved two long-delayed decrees needed to proceed with the stalled 2013 offshore licensing round.
Meeting for its first time since passing a parliamentary vote of confidence in mid-December last year, the government of Saad Hariri passed one decree endorsing the delineation of Lebanon’s 10 offshore blocks as devised by the Lebanese Petroleum Authority and another concerning the model licensing agreement and tendering procedure. Both decrees were necessary for Lebanon to set a closure date for receiving bids, but their approval will not lead to the automatic resumption of the round. Having taken this step, the government now seeks the passage of a new petroleum tax law before the licensing round is fully revived.
Lebanon launched a pre-qualification round in February 2013 in which 12 international oil companies – among them ExxonMobil, Chevron and Shell – were selected as operators and another 34 okayed as consortium partners. The round was officially opened in May of that year with a closing date tentatively set for the following November.
In the meantime, the government of Najib Miqati resigned in March 2013 and in its caretaker capacity did not have the authority to approve the decrees. Subsequently, the government formed by Tammam Salam in February 2014 was unable to secure approval due to Lebanon’s numerous internal political differences. The situation was complicated further when Michel Suleiman’s term as president expired in May 2014.
Political differences prevented parliament from electing a new president until October 2016, when Michel Aoun was elected during the parliament’s 29th attempt to hold a quorum. Saad Hariri, son of assassinated former prime minister Rafiq Hariri, shortly thereafter agreed to form a government, his second time as serving as the country’s prime minister.
The government’s failure to pass the decrees proved frustrating to the qualified bidders and local businesses seeking a role in the new economic sector. Initially there was considerable interest in the Lebanon offshore, especially in light of the 35 trillion cubic feet of gas (991 billion cubic meters) that had been discovered offshore Israel, and the 4.5 tcf (127 bcm) Aphrodite discovery offshore Cyprus, but repeated postponements of the closing date left qualified companies believing the emerging Lebanese energy sector would be a non-starter.
During the sixth postponement of the closing date in August 2014, then Energy Minister Arthur Nazarian said the closing date for the round would be six months after whenever the government endorsed the two decrees, effectively suspending the round indefinitely.
But that will not be the case now. The passage of a new petroleum tax law, in which the government will look to secure a 25% tax on profits, will first be reviewed by the cabinet and then presented to the parliament for approval. The cabinet is expected to take three weeks to review the law, but there is no guarantee of quick passage through parliament despite the growing momentum now that the government has made this progress.
Lebanon’s new Minister of Energy and Water Cesar Abou Khalil, a member of Aoun’s Free Patriotic Movement and former advisor to the two previous energy ministers, said last week after the government approved the decrees that Lebanon would tender five of its 10 blocks when bidding reopened. He did not identify those blocks, but he told a press conference that it is possible that exploration contracts could be signed before the end of this year and that drilling might begin in mid-2018. This could be possible due to the fact that Lebanon has had extensive 2D and 3D seismic work carried out within its 22,000 square kilometer exclusive economic zone (EEZ). According to the Lebanese government, there is a 50% chance that its EEZ contains up to 96 trillion cubic feet of natural gas and 865 million barrels of liquids, but at this point this figure is regarded as speculation. Only drilling will tell. Furthermore, it will likely be the mid-2020s before an energy industry is producing gas or liquids, but considering the rate at which neighboring Israel and Cyprus have been moving, Lebanon will not be that far behind.
A source close to the Lebanese Petroleum Authority told this correspondent that a new pre-qualification round is expected to be held in parallel with the reopening of the licensing round. According to the source, those companies already qualified will not have to re-apply for qualification but some that were qualified as partners may wish to apply for operator status. A determination on qualification will be made regarding new participants after their bids have been received.
“Bidding will be carried out over a six months period,” the source said, “so the idea is to carry out the pre-qualification evaluation of companies new to the process during the six-month bidding timeframe, or it can be a post-qualification option.” He added, “a number of new companies have shown interest.”
Lebanese parliamentary elections are due to be held in May, but the source said that the Hariri government is planning to reopen the licensing round before then and that the election should not interfere with the procedure. The post-election government is expected to look very much like the one that has just taken office.
One other problem facing Lebanon’s nascent energy sector is a dispute with Israel over an 854-square kilometer wedge of offshore territory along their common maritime border that effects Lebanon Blocks 8, 9 and 10. Israel has awarded no exploration licenses within the disputed area. The US has attempted during the last several years to negotiate a compromise over the territory, but with no working government or president in office, talks with Lebanon on the issue were essentially put on hold.
Like the passage of the decrees and a new tax law, it would be in Lebanon’s best interest to resolve the maritime dispute before the licensing round opens. If Beirut should choose to tender any three of those blocks, it could find a reluctance from participants to bid for the licenses, even though the seismic data shows them to be highly prospective. Given the fact that the two countries technically remain at war, compromise might not come easy. Yet both Lebanon and Israel well know that war is not a healthy environment for emerging, or even established, energy sectors. There are plenty of examples throughout the Middle East and North Africa that prove this.