NEWS NATIONAL NEWS        28/08/2020

EU threatens Turkey with sanctions over Mediterranean drilling

The European Union has warned Turkey that it could face sanctions unless it takes steps to defuse an escalating dispute with Greece in the eastern Mediterranean.

 

Tensions between the neighbours have spiralled in recent weeks, with Ankara continuing to drill for oil and natural gas in waters contested by Greece near the island of Cyprus. Both countries have also been carrying out military exercises in the region raising concerns about the possibility of a confrontation.

 

With the aim of limiting Turkey’s energy exploration activities, the targeting of individuals and ships, with the blocking of the use of European ports, as well as possible general economic sanctions, are being examined and will be reviewed at the EU summit on September 24th and 25th.

 

German Chancellor Angela Merkel and NATO are taking an active role to mediate and prevent further escalation. Meanwhile, Greece and the UAE have begun joint air force training exercises in the eastern Mediterranean just as Greece, France, Italy and Cyprus completed a 3-day sea and air exercise. Turkey, which rejects Greece's maritime claims and says its drilling activities fall within its own exclusive economic zone, said the EU had "no authority" to demand it stop a "legitimate" search for resources in the eastern Mediterranean.

 

Over the last decade, there has been a scramble for resources in the East Mediterranean. Both Turkey and Greece have to import nearly all their energy resources and both now are looking to taking a share of Mediterranean resources. Ten years ago Israel, the most energy-starved country in the Middle East, announced it had discovered a huge hydrocarbon resource. Beneath 1,645 metres of sea were some 450 billion cubic metres (bcm) of recoverable gas reserves, in a field presciently named Leviathan. Israeli officials dubbed it the best energy news in the country’s history. In 2015 Eni, an Italian oil-and-gas giant, discovered the huge Zohr field off Egypt’s coast. Zohr and Leviathan have become important suppliers of gas to their domestic markets. Egypt has become a hub for foreign investment. Eni’s swift development of Zohr brought other big oil and gas companies to Egypt, lured by geology, favourable regulations and a large, growing domestic market for gas. It helps that Egypt is also home to two large liquefied natural gas (LNG) facilities, which can accept gas by pipeline and turn it into LNG suitable for shipping around the world. Shared gas interests have also fostered unlikely collaboration. Leviathan’s gas serves not only Israel but Jordan and Egypt. Leviathan’s developers, America’s Noble Energy and Israel’s Delek Drilling, have taken minority stakes in the pipeline that serves Egypt. They plan to export 18.4 mcm a day of Israeli gas to Egypt by mid-2022. Big gas fields have been found near Cyprus, too, their names borrowed from Ovid or Homer: Glaucus (ExxonMobil and Qatar Petroleum), Aphrodite (Noble Energy, Royal Dutch Shell and Delek Drilling) and Calypso (Eni and Total). It has been estimated that Egypt, Israel and Cyprus have 2.3 tcm of gas. Despite these developments, lower energy prices have adversely affected the economics of eastern Mediterranean energy. Oil and gas companies, under pressure from investors, were cutting capital spending even before covid-19 punctured energy demand. The price of gas is almost half what it was in 2010. Chevron in July said it would buy Noble for a bargain USD 5 billion. ExxonMobil, Total and Eni have delayed further drilling off Cyprus, as the firms drastically cut spending and struggle to deploy crews in the pandemic.

 

The squabble over energy resources has reignited past conflicts between Ankara and Athens. The rivals nearly went to war in 1996 over uninhabited islands in the Aegean Sea. Greece complained that Turkish warplanes ventured into its airspace over 3,000 times in 2017. They also disagree over the status of Cyprus, split into two after a Turkish invasion in 1974. The current dispute, however, is part of a larger tapestry of growing tensions in the eastern Mediterranean over energy, security and ideology. Turkey finds itself pitted against a broad coalition of European and Middle Eastern rivals in battlegrounds stretching from Libya to Syria.

 

The awkward geography of the eastern Mediterranean is at the root of the rival claims. Greece argues that each of its scattered islands, however small, is legally entitled to its own continental shelf with sole drilling rights. Turkey, hemmed into the Aegean by a forbidding archipelagic wall of those islands, counters that the eastern ones rest on Turkey’s continental shelf and refuses to accept that they generate economic zones around them. It is one of only 15 countries, including Israel and Syria, that have refused to join the UN Convention on the Law of the Sea, which largely supports Greece’s case.

 

Turkey, which has been increasingly at odds with its Western allies over a number of issues, from the lack of democracy and human rights at home to migration flows into Europe, is also the only country to recognise the breakaway republic in the northern third of Cyprus and therefore the legitimacy of its waters. It insists that any exploitation of energy resources in the region must take into account Northern Cyprus. To back up these demands, it has sent exploration ships with naval escorts into Cypriot waters and those of Greek islands, most recently around Kastellorizo, close to Turkey’s mainland.

 

Turkey has so far discovered no new Mediterranean gas of its own. However, it also aspires to become an energy hub through the Trans-Anatolian pipeline (TANAP), which can deliver up to 16bcm from Azerbaijan to Turkey and Europe each year. Turkey plans to increase the pipeline’s capacity to 61bcm, but Azerbaijan does not have enough to meet this capacity. Turkmenistan has among the world’s largest volumes of gas, but Russia and Iran keep preventing pipelines from there. The only sources of gas for Turkey which do not involve Russia are Iraqi Kurdistan or Israel or the eastern Mediterranean.

 

Others in the eastern Mediterranean have snubbed Turkey with Greece, Cyprus and Israel signing in January a deal to build a 1,900 km undersea pipeline to carry 10 bcm of natural gas a year (around a tenth of the EU’s needs) to Europe, bypassing mainland Turkey. The viability of the plan is questionable. The pipeline would travel at extraordinary depth, 3km below the surface in one stretch, as well as through areas of seabed prone to earthquakes. Industry analysts reckon its projected cost of USD 6bn-7bn is optimistic. In January, without the participation of Turkey, Cyprus, Greece, Israel, Italy, Jordan and Palestine established a bloc called the East Mediterranean Gas Forum to solve issues relating to the East Mediterranean. France has applied for membership and America for observer status. The forum has taken on an increasingly Turkosceptic stance as many of its members are in confrontation with Turkey over a host of issues beyond energy.

 

For years, Libya has been riven by civil war between a un-recognised government in the west and the forces of Khalifa Haftar, a renegade general, in the east. Turkey supports the government, which works with Islamist militias, whereas France, Egypt, the United Arab Emirates (UAE) and Russia have aided General Haftar, who last year came close to seizing Tripoli, the capital. Though it now claims to be taking a neutral stance, France, which is battling jihadists in Mali, views the general as a useful bulwark against extremist forces. Total, France’s largest energy company, has investments in Libyan oilfields controlled by him. French anti-tank missiles were found at one of the general’s bases last summer, though France denied sending them.

 

In January, Turkey halted General Haftar’s offensive by sending arms, troops and thousands of Syrian mercenaries to support the government in Tripoli. That prompted a crisis in June, when a French frigate, operating as part of a NATO mission, was threatened by a trio of Turkish naval vessels while inspecting a ship suspected of breaking the un arms embargo on Libya.

 

Mr Erdogan’s intervention in Libya starkly illustrated how energy and security in the region are entangled. His price for halting General Haftar was the Libyan government’s assent to a maritime deal bolstering Turkey’s claims. The accord mapped out Libyan and Turkish continental shelves and EEZs spanning the Mediterranean. They overlapped with those of Cyprus and Greece, ignored the existence of Crete and Rhodes, and pointedly cut across the path of the proposed pipeline. The deal prompted howls of complaint in Greece. As a result, on August 6th, Greece and Egypt, which supports General Haftar and chafes at Turkey’s support for Islamist factions in the Middle East, signed their own maritime accord. That contributed to Mr Erdogan’s decision to send in the Oruç Reis which caused the latest flare-up.

 

Libya is only one of several Franco-Turkish flashpoints. Last year Mr Macron denounced a Turkish offensive in northern Syria which disrupted American, British and French support for Kurdish fighters battling Islamic State. France also responded to Turkish incursions into Cypriot waters by expanding its naval presence in Cyprus and conducting joint military exercises in the area with Greece, Cyprus and Italy.

 

Turkey’s relations with other eastern Mediterranean countries have also soured. A decade ago Israel and Turkey were close military partners, but that ended after Israeli commandos attacked Turkish civilian ships trying to break a blockade of Gaza in 2010. Turkey is also is at loggerheads with both Egypt and the UAE. A range of grievances against Turkey has helped to meld a trio of European states (Greece, Cyprus and France), a pair of Arab ones (Egypt and the UAE) and Israel into a loose but formidable geopolitical front.

 

When Greece and Turkey came close to war in 1996, America helped calm the crisis. It remains a big player in the region and has its own gripes about Turkey. After Mr Erdogan bought Russia’s s-400 air-defence system against NATO objections, the Trump administration kicked Turkey out of the programme for buying F-35 warplanes.

 

Last December, America lifted an arms embargo on Cyprus, part of a batch of measures that would boost energy security in Cyprus and Europe, from which American energy companies would benefit. Last month America said it would fund military training for the island for the first time and sent an aircraft-carrier to exercise with Greece off Crete. However, American policy is erratic. Its approach to Libya is muddled, and Donald Trump is unlikely to pay much attention to the intricacies of maritime boundaries as America’s presidential election looms. That makes the EU, which Cyprus joined in 2004, a vital actor. The club lacks America’s armadas. But it has other levers at its disposal. It has already sanctioned Turkey for “unauthorised drilling activities”. Mr Macron is keen to go further.

 

The problem is that the EU, which makes foreign-policy decisions by consensus, is itself divided. Italy and Spain want to smooth things over with Turkey. Germany was irked by Greece’s decision to tweak Turkey’s nose by signing the maritime pact with Egypt just a day before talks between Greece and Turkey, which were mediated by Germany, were to take place.

 

Others are irritated by France, particularly its support for General Haftar in Libya. There is little love for Turkey in Western capitals these days, but the French way of confronting Erdogan is not popular either.

 

On August 19th,  European leaders expressed “full solidarity” with Greece and Cyprus and agreed to discuss the issue further in September. However, any European reaction is likely to be weak, much to the frustration of France which  infuriates France, which believes someone should stand up to Turkey’s challenges to the EU’s maritime borders.

 

Neither Turkey nor Greece can afford these rising tensions in the Mediterranean. Both depend on their coastlines for billions of dollars from tourism. The few foreigners considering a trip to a Turkish or Greek resort later this year may be willing to risk covid-19, but not war. But neither country can back down easily. Mr Mitsotakis, Greece’s centre-right prime minister, is held hostage by a nationalist faction in his New Democracy party with enough MPs to topple his government. Mr Erdogan may be a divisive figure, but his Mediterranean policy wins bipartisan backing at home.

 

On August 16th, Turkey’s foreign ministry vowed to press ahead with exploration. On August 18th, another Turkish vessel, the Yavuz, a drillship, headed for Cypriot waters to start four weeks of seismic surveys. A third vessel, the Barbaros, has been in the area since late July.



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