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Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

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Mediterranean Oil Tensions Are Boiling Over

Under pressure in Libya--where it’s gone head-to-head with General Haftar in an ongoing battle to decide who gets to ultimately control the country’s oil revenues--and floundering in Syria, Turkey is once again upping the ante in the Mediterranean, this time preparing to issue new oil and gas exploration licenses in direct confrontation with the European Union. 

It’s not just about Cyprus, anymore. Turkey’s state-run oil and gas company has been given licenses from the Turkish government to explore for oil and gas in 24 locations in the East Mediterranean. Seven of those locations are just off the coast of key Greek islands. 

It’s a direct provocation that has Greece infuriated, and experts worried that this could lead to direct clashes once Turkey starts exploration drilling. 

Last weekend, Turkey released a draft plan for Turkish Petroleum’s exploration license. 

Source: Resmigazete.gov.tr

On Monday, Greek Foreign Minister Nikos Dendias said in a statement that the country “stands ready to deal with this provocation should Turkey decide to implement this decision”. 

The draft plan explicitly violates Greek sovereignty, and it is designed to take advantage of a new maritime boundary agreement Erdogan wrangled last year with the Government of National Accord (GNA) in Libya. This was the trade-off for Libya’s aid in fighting back General Haftar in his push to take the Libyan capital, Tripoli. 

The maritime boundary is meant to perform a pincer movement against Cyprus, which is drilling offshore in its EEZ where Turkey has also provocatively deployed drillships. In the Greek Cypriot EEZ alone, there are an estimated 120 billion cubic meters of natural gas, for which drilling began in 2011. The first license here was granted in 2008 to American Noble Energy (the same company behind the massive Israeli discoveries).

Erdogan’s desperation is born out of the fact that Turkey is being squeezed out of a role in the oil and gas riches of the Mediterranean, which is arguably the world’s next biggest, untapped oil and gas hotspot.

This brewing confrontation took root most noticeably in 2010/2011 when Israel made a massive discovery of gas offshore in the Levantine Basin, with the Leviathan and Tamar fields, both of which are now pumping and exporting and threatening to shift the balance of power from Turkey all the way to Egypt and everywhere in between. Related: Lithium-Ion Battery Demand To Increase By More Than 1000% This Decade His latest move to issue more exploration licenses, even encroaching on Greek maritime territory, comes after Israel, Greece and Cyprus signed an agreement to build an underwater pipeline to carry Israeli gas to Europe, cutting out Turkey altogether. 

This $7-billion underwater pipeline would run for some 2,200 kilometers to Italy, running by the coast of Cyprus and the Greek island of Crete and through the Egyptian maritime zone and the Libyan maritime zone. 

This latter is where Turkey has inserted itself. 

Prior to this maritime deal, Turkey, Libya, and Greek Cyprus had agreements with Lebanon and Egypt in terms of oil and gas exploration. But the new demarcation scoops up 39,000 square kilometers of EEZ held by Greece. 

Source: Middleasteye.net

Turkey will find itself (as usual) rather alone in this fight with the exception of Russia which finds its own designs aligning with Turkey because this Israeli gas would undermine Russian gas in Europe. But Turkey is a fickle (at best) ally.

Erdogan will want to use this leverage to force the pipeline coalition to include a Trans Anatolian tie-in for passing through the newly demarcated maritime zone between Libya and Turkey. His new licensing of exploration for Turkish Petroleum in Greece’s maritime zone is intended to send a specific message: Cut me in or I will make trouble, both offshore Greece and offshore Cyprus.

Erdogan, and his desire to restore Turkey’s Ottoman Empire prowess, is making a play for leverage in order to be a part of this new energy equation. Related: What's Holding Natural Gas Prices Back?

It won’t be easy, but Erdogan is counting on a lack of effective response from the European Union, as well as from the UAE and Egypt--all of which issued a joint statement last month condemning the maritime territorial grab. Erdogan’s response was to call the country signatories an “alliance of evil”.

Tensions are expected to gain further momentum later this month, when the leaders of the pipeline coalition countries are due to meet in Israel, with Greece and Cyprus attending separately.

But in the meantime, much like Iran succeeds in provoking the United States without much of a response, Erdogan will continue to push EU buttons and get a slap on the wrist in return. EU Foreign Affairs Minister Josep Borrell has said that the bloc has sent a “strong message” to Turkey, but other than being “in close contact” with colleagues in Cyprus and Greece, and kindly calling on Turkey to “stop drilling in areas where there is an EEZ or territorial waters of Cyprus and Greece”, the claws aren’t out and the teeth aren’t bared and Athens and Nicosia are likely wondering if they’re going to have to get physical on their own. 

By. Charles Kennedy for Oilprice.com

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Leave a comment
  • Lee James on June 07 2020 said:
    We enjoy many benefits from using (burning, mostly) oil and gas. But do we sufficiently factor into our thinking and planning the strife, acrimony and out-right fighting we habitually have over petroleum.

    We'll eventually phase out burning petroleum. I sure hope we won't fight over clean energy the way we have always fought over dirty energy. There's a big cost to us all for oil dependency.

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