Erdogan struggles to destabilize the region in an effort to win time, being squeezed between the United States and Russia more than ever before…

Anastassios Tsiplacos - Managing Editor

The recent mr. Erdogan’s extremely brief visit to Washington came with more losses rather than gains. One of the core issues was how Turkey’s purchase of the S-400 jeopardised the F-35 programme in which Ankara is considerably invested. The turkish President hoped to keep possible increased military cooperation with the United States, including the purchase of Patriot missiles, as a bargaining chip but was told that the U.S. Congress would not be swayed.

That said, hours after the meeting, he received a takeaway “carrot” for his trip home, when Senator Graham blocked a bill recognising the Armenian genocide. That shows the Congress will be the institution continuing to hang the sword of Damocles over Erdogan’s head. The visit marked also an end to his years-long ambitions for regime change in Syria. Instead of come out of his Washington meeting on top, he left playing for time, hoping he can somehow gain leverage regarding U.S. defence cooperation ahead of the NATO meeting in early December.

So the turkish President, in order to balance the above setbacks, has resorted to his well known tactic. Immediatelly after his return from Washington, he reiiterated the threats to “open the gates” to Europe for millions of refugees. At the same time, authorities in Ankara published a video claiming that Turkey’s Yavuz drillship was embarking on a second operation within block 7 of Cyprus’ Exclusive Economic Zone, the turkish Vice President Fuat Oktay announced that the country’s Fatih drillship would begin drilling operations off northeastern Cyprus, and according to a fresh navigational telex issued by Ankara, the Oruc Reis research vessel is heading to an area off the island’s west coast.

These developments are not particularly surprising, as Turkey has for many years expressed in several ways the importance of the Eastern Mediterranean in general, and of Cyprus in particular, to its interests. For Ankara, the stakes are very high and the cost so far has been very acceptable. In particular, developments in recent years pose the following risks for Turkey: It may find itself outside geopolitical partnerships and other processes in the Eastern Mediterranean, observing -without any possibility of intervening in- the geopolitical and economic upgrade of Cyprus, and it may be sidelined in any energy planning, although the size of the oil and gas deposits and the region’s transformation into an energy hub are still uncertain issues today.

Considering it inconceivable that it might be crowded out in a highly important region, Turkey has proceeded with a significant economic investment, with the purchase of specialized research vessels and drilling equipment, acting outside international law by systematically questioning the right of Cyprus to delimit its EEZ and exploit any hydrocarbon deposits there.

As the reactions of the United States -which is involved in a wider geopolitical game- and the European Union are rather lukewarm, Turkey is expected to continue its activities. Even more, because the turkish President seems to have the protection of his US counterpart, who invited him to Washington despite his closest associates’ objections and the general rather hostile climate towards the turkish President. Moreover because, after the much anticipated meeting at the White House to address the crisis in relations, Trump said he was “a great fan” of the Turkish leader and that they had a “productive” encounter!

Additionally, Turkey’s foreign ministry said in an official statement, it will not bow down to threats and step back from its rights in the region, blasting the EU over its plans to sanction Turkey for its unauthorised gas drilling in the Eastern Mediterranean. “We have consistently stated since 2004 that we will not allow for our rights to be unilaterally seized. It is truly noteworthy that a real chance for cooperation in the eastern Mediterranean has been taken hostage through unrequited and incomprehensible support for an invalid administration by the EU, disgregarding international law,” the statement said.

The Eastern Mediterannean: how the rest regional and other stakeholders will react?

Gas reserves in the Eastern Mediterranean were only recently discovered and remain largely underexplored, with their total actual size yet to be evaluated. Out of these, five major discoveries stand out: the Tamar and Leviathan fields, discovered in 2009 and 2010; offshore Israel (with an estimated capacity of 282 bcm and 621 bcm of gas respectively); the Aphrodite field, discovered in 2011 off of Cyprus (with 128 bcm); and the 2015 major discovery off the cost of Egypt, the Zohr field, which holds the largest capacity in the Eastern Mediterranean with an estimated of 845 bcm of natural gas. The discoveries have aroused the interest of European countries looking for supply alternatives outside Russia, as well as of the energy companies. As a result, negotiations, predominantly bilateral, have been launched between various countries of the region. Examples include the €12 billion deal for Egypt to buy gas from Israel’s Tamar and Leviathan fields and the tripartite memorandum of understanding between Cyprus, Greece, and Israel to build the EastMed pipeline to Europe.

Among the countries of the Eastern Mediterranean – a region with a long history of rivalries and disputes – there is a growing understanding that the window of opportunity to use natural gas to improve their economic situation significantly, may close due to strong competition from other regions that are more stable politically and have larger quantities of natural gas. The growing economic wisdom in the Eastern Mediterranean basin will not solve the various disputes between the countries of the region, but hopefully it may reduce the chances of those conflicts erupting.

In this context, the energy ministers of Egypt, Greece, Cyprus, Italy, Israel, Jordan, and the Palestinian Authority met in Cairo in January 2019, and established the Eastern Mediterranean Natural Gas Forum. The Forum is intended to help its members benefit from their natural resources and infrastructure. Emphasized among the declared aims was the inherent benefit to members from the use of existing infrastructure to transport natural gas, and from the development of alternative infrastructures in response to future discoveries of natural gas.

The participation of three European Union members in the Forum is essentially a continuation of the dialogue that Israel began with Greece and Cyprus. This dialogue rests on two components. The first is the idea of a pipeline to transport the gas from the Eastern Mediterranean to Europe. The second is the creation of a framework for communication and coordination vis-a-vis the aggressive regional policy of Turkey. For more than a decade since the natural gas reserves were discovered, the European Union has avoided direct involvement – political or financial – in the issue of regional energy cooperation. However, under pressure from Greece, Cyprus, and Italy, the EU agreed to participate in financing a feasibility study for a maritime gas pipeline. The pipeline, which in the first stage will be able to transport 10 bcm per year, and with a construction cost estimated at $6 billion, was defined as a “joint interest project” by the EU.

Just recently, the US began exhibiting overt interest in the development of natural gas resources and related activity in the Eastern Mediterranean, attested to by visits to the region of Secretary of State Mike Pompeo at the Jerusalem’s Trilateral of Greece, Cyprus and Israel in March, as well as by Secretary of Energy Rick Perry and Assistant Secretary of State for Energy Resources Francis Fannon. Both were present at the second meeting of the Natural Gas Forum on July 24 in Cairo and mr. Perry at the first ministerial trilateral of Greece, Cyprus and Israel on August 7 in Athens. Moreover, the US maintains its presence in the Mediterranean mainly for global considerations of blocking Russian penetration into the region. European and American involvement in regional natural gas activity is considered economically and politically important, since it provides international sponsorship and makes it easier for the region’s governments, striving for regional cooperation to advance the development of resources.

What’s behind the recent trilateral summit of Egypt, Greece and Cyprus

Given the significant breadth of Turkish claims and its extremely maximalist positions on issues directly related to Greece and Cyprus, it is necessary to formulate a comprehensive policy and to utilize the entire foreign policy toolkit: alliances, bilateral diplomatic contacts and the opening of parallel communication channels, exploring prospects for bilateral and/or trilateral economic and other cooperation, as well as sending a clear message about regional stakeholder’s red lines, while maintaining a strong capacity of deterrence.

The 7th Trilateral Summit between Egypt, Cyprus and Greece was held on October 8th at Ittihadiya Palace in Cairo. The summit was chaired by Egyptian President Abdel Fattah al-Sisi and involved Cypriot President Nicos Anastasiades and Greek Prime Minister Kyriakos Mitsotakis. It was the most recent summit between the three countries’ leaders aimed at forming an energy-based alliance in the East Mediterranean. The energy dossier, particularly natural gas, was of utmost importance at the summit, in addition to bilateral trade and investment relations. In a previous meeting, the three countries agreed to broaden strategic cooperation on energy, including how to transport newly found gas in the region to Europe and linking the electricity grids of Europe and North Africa via an undersea cable. The 2,000 megawatt cable, known as the EuroAfrica Interconnector, will stretch nearly 1,000 miles from Greece to Egypt through Cyprus.

At the press conference after the Summit, the joint declaration stated that the three countries underlined the importance of making additional efforts to boost security and stability in the Eastern Mediterranean region, and strongly denounced any Turkish attempt to undermine the Syrian territorial integrity. Cyprus, Greece and Egypt called on Turkey to “end its provocative actions” in the Eastern Mediterranean condemning them as “unlawful and unacceptable”, including exploring for natural gas in Cyprus’ territorial waters, which they called “a breach of international law.” Their statements followed Turkey’s announcement that it sent a drilling ship to the Block 7, where Nicosia has licensed TOTAL-ENI’s consortium, to drill for in the Cyprus’s EEZ. They also expressed willingness to promote cooperation in the fields of natural gas drilling and transportation, and stressed the need for stronger international efforts in combating terrorism and extremism.

Following the above joint declaration, Turkish Foreign Ministry spokesman Hami Aksoy issued a particularly harsh statement against the three countries saying: “We reject the unfounded allegations contained in the joint statement issued after the meeting of the leaders of Egypt, Greece and the Greek Cypriot Administration (Republic of Cyprus). Steps with political expediencies aiming to isolate and ignore Turkey and the Turkish Cypriots in the Eastern Mediterranean have no chance of success. There is no other way for stability in the eastern Mediterranean but also for a just lasting solution to the Cyprus problem. Projects which do not include Turkey and the Turkish Cypriots in this region will never be efficient and effective.”

The Aftermath

Soon after the 7th Trilateral Summit in Cairo, Cyprus and the Aphrodite consortium signed an exploitation license and a revised production sharing contract, aiming to start natural gas production in 2025, generating projected revenues of $9.3 billion for a period of eighteen years. The 25-year exploitation licence is the first of its kind signed with Cypriot EEZ licensees and it’s based on the final development and production plan of Aphrodite, agreed between the Cypriot authorities and the consortium of Noble Energy, Shell and Delek Drilling. Shell will be the buyer of Aphrodite’s natural gas.

On the basis of the plan, the natural gas from Aphrodite will be transferred via a subsea pipeline to Egypt’s Idku LNG plant from where it will liquified and exported to European and international markets, an option deemed as the optimum one by the Ministry of Energy. However, the pipeline connecting the Aphrodite gas field with Idku LNG plant is not included in the Development Plan and will be discussed with the consortium.

The first milestone covers the appraisal well, while the Front Engineering and Design (FEED) is the second and the Final Investment Decision (FID) is the third milestone.The capital expenditure (CAPEX) for the first phase of development are estimated at €3 billion, with an additional €2 billion in the second phase with additional production drillings and €2 billion in operating expenditure. Furthermore, the appraisal well which will also be a production well is expected to be carried out in 18 months.

The consortium’s development and production plan provides for projected revenue for Cyprus amounting to $9.3 billion on the median and most plausible scenario for 18 years amounting to approximately $500 million per annum. Cyprus is expected to receive its first revenue in 2025. This development is undoubtedly a significant milestone in the development of hydrocarbons discovered in the Cyprus EEZ. Not only it is the first such licence, but it enables the consortium to enter negotiations with Egypt’s Idku LNG plant to secure a gas sales contract for this gas.

MEDUSA 9: Growing military presence, partnership and military cooperation

As tensions with Turkey over gas exploration and drilling operations in the Eastern Mediterranean are growing, the 3 states in a manifestation of their growing military presence in the region, in order to boost its security and stability, and in light of the growing partnership and military cooperation between their armed forces, launced the “Medusa 9” joint military exercise that was held South of Crete and the Peloponnese between 1 and 9 November. The exercise aimed to polishing the skills of officers participating in various naval operations, exchanging combat and field expertise, improving readiness to carry out any joint tasks under different circumstances, and protecting the vital and economic targets in the Mediterranean against any potential threats.

Greece participated with three frigates, two rocket launchers, a submarine, a landing ship, an early warning aircraft, eight F-16s, three Chinook helicopters, four Apache attack helicopters and special forces units.

Egypt took part with the Mistral-class helicopter carrier “Gamal Abdel Nasser”, “El Fateh” frigate, a german-made Type 209 submarine, the “Sulayman Ezzat” rocket launcher, the “El Seddiq” minehunter, and six of F-16 fighter jets. In addition, elements of the egyptian paratroopers and commandos, as well as a number of Navy College students that participated in the external training camp.

This is the fourth consecutive year that Cyprus is taking part in the exercise with its armed forces, participating with the Offshore Patrol Vessel (OPV) “Ioannides”, an Underwater Demolition Team and military staff officers.

At the same time, the Ministers of Defence of the three nations Nikos Panagiotopoulos (Greece), Mohamed Ahmed Zaki (Egypt) and Savvas Angelides (Cyprus) held a trilateral meeting on Tuesday, November 5, in Athens during which they discussed developments in the Eastern Mediterranean as well as the cooperation of the three countries on defence and security issues. Next day they watched the final phase of the exercise in the wider Crete region.

Observers from Bulgaria, France, Germany, the United Arab Emirates, Italy, Jordan, Kuwait, Morocco, Bahrain, South Korea, Portugal, Romania, Saudi Arabia, Serbia, and the United States were invited to the military exercise.

“Medusa” joined exercises are a real game changer for Egypt, Greece and Cyprus and Turkey will not easily allow that. One more reason for the three countries to continue preparing for any eventuallity.


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