Not about ZN directly but...some political ramifications
Jan 27, 2019 8:19:23 GMT -5
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Post by Ethan / JRyan on Jan 27, 2019 8:19:23 GMT -5
Houston Chronicle on January 25, 2019
As oil companies expand into Mediterranean, tensions build
Thanks Tisdal for the linky!!!
As oil companies expand into Mediterranean, tensions build
WASHINGTON - Three months ago, Exxon Mobil was ready to drill a natural gas well in the eastern Mediterranean Sea, off the coast of Cyprus. Then Turkey’s Foreign Ministry released a statement warning oil companies considering drilling in that area to “to act with common sense and to duly consider the realities on the ground.”
Although couched in diplomatic language, the message was clear. Less than a year earlier, Turkish naval ships forced the Italian oil company Eni to suspend drilling off the coast of Cyprus, part of which Turkey claims as its territory.
Massive gas discoveries off the coasts of Egypt, Israel and Cyprus, led by international oil companies including Houston’s Noble Energy, Royal Dutch Shell and Exxon, are inflaming tensions in an already volatile region now facing the huge influx of wealth that comes with being the world’s next big energy play.
Cyprus itself has been geopolitical tinderbox for decades, sparking a Turkish invasion in the 1970s that divided the island nation between ethnic Turks and Greeks and led to a United Nation’s peacekeeping mission that has lasted nearly a half-century.
“Turkey has shown a willingness to defend their interests even if it brings them into conflict with other countries,” said Bulent Aliriza, a senior associate at the Washington think tank Center for Strategic and International Studies. “This issue bears watching because I think there’s going to be trouble.”
Exxon Mobil, which went ahead with its plans, has so far avoided trouble. But the possibility of fighting breaking out in the Eastern Mediterranean has many in the oil sector worried.
On HoustonChronicle.com: In Guyana, Exxon project stirs international tensions
Charles Ellinas, the former CEO of the Cypriot National Hydrocarbon Co. and now a senior fellow at the Washington think tank Atlantic Council, said there is good reason for concern. Turkey is unlikely to interfere with American companies, lest it provoke the U.S. military. But it might disrupt the operations of the French oil company Total, which has partnered with Eni on its contract to drill in waters in the Cypriot waters claimed by Turkey, Ellinas said.
In addition, he said, the geopolitical uncertainty and potential for military action could make it difficult to find the financing needed to develop the offshore gas fields.
“This sort of situation is not conducive,” he said. “We can talk about international agreements and the U.N. But when it comes to major projects and billions of dollars in investment, can you tell me a bank that will put the money in when there is a political threat? We need a political solution.”
The boundaries of Cyprus, a 3,500-square-mile former British colony, have been under dispute since it won independence in 1960. Cypriots of Greek heritage and those of Turkish heritage battled for more than a decade before a coup d’etat by Greek Cypriot nationalists spurred the invasion by Turkey, which feared a union between Cyprus and Greece.
The invasion established the Turkish Republic of Northern Cyprus, which neither the United States, Europe nor the United Nations recognizes. The government, which is recognized only by Turkey, must operate under an international embargo that prevents flights from going anywhere but Turkey. Athletes from the Turkish Republic of Northern Cyprus are unable to play in international competition.
Their Foreign Minister Kudret Özersay traveled to New York and Washington earlier this month, as part of a diplomatic push to pressure oil companies to start negotiating with Turkish Cypriot officials. As it stands now, the official Cyprus government has agreed to split gas revenues with the Turkish Cypriots, but has not consulted with them on the development of the gas fields.
Ozeray said his government was considering legal action through international courts — though he declined to go into specifics — to force the Greek Cypriots and oil companies to bring them into the loop, but would prefer a “more reasonable and pragmatic approach.”
“The [international] decision-making process may take time. Diplomacy is process, not one meeting,” he said in an interview. “We try to show everyone it is worth it to think twice. Causing instability in the region may have repercussions for the foreign policy.”
Plenty is at stake for the oil sector as well.
At a time of middling natural gas prices and hesitation around large offshore projects, the huge volumes of gas in the Eastern Mediterranean have turned the region into one of the world’s hottest exploration areas, said Robert Morris, a senior energy analyst at the research firm Wood MacKenzie. Interest was sparked in 2009 with the Noble’s discovery of Israel’s Tamar field, estimated to hold more than 21 trillion cubic feet of gas.
On HoustonChronicle.com: Israel comes to Houston seeking partners to develop gas reserves
Then in 2012 Noble announced its Aphrodite field off the coast of Cyprus, holding 4.5 trillion cubic feet of gas. Three years later Eni announced the Zhor field off the coast of Egypt, with an estimated 21.5 trillion cubic feet of gas.
“A huge amount of gas has been discovered over the last 10 years,” Morris said. “They might be deep water wells, but in some of the fields you need to drill very few wells because the reservoir is so productive.”
Right now, all eyes are on Exxon’s exploratory wells off Cyprus, the results of which are expected to be announced in the weeks ahead. The Texas oil giant has already floated the idea of building a LNG export facility on Cyprus, should the wells prove as prolific as hoped.
And Israel, Egypt and Cyprus announced earlier this month they had formed a joint group to develop the infrastructure necessary to move gas out of the eastern Mediterranean, a region lacking in the LNG terminals and pipelines necessary to move gas to markets in Europe and Asia.
But the political issues around Cyprus and Turkey continue to cloud that promise. And considering the long history of conflict in the region — stretching back not just decades but centuries to the days of the Ottoman Empire — finding a solution will be difficult, said Aliriza, of the Center for Strategic and International Studies.
“You bring in the existing problems, a Syrian war, a Lebanese civil war, and then add energy, which always bring the potential for dispute,” he said. “The Eastern Med has a long history of dispute, and this is feeding off of that and adding new ones.”
Although couched in diplomatic language, the message was clear. Less than a year earlier, Turkish naval ships forced the Italian oil company Eni to suspend drilling off the coast of Cyprus, part of which Turkey claims as its territory.
Massive gas discoveries off the coasts of Egypt, Israel and Cyprus, led by international oil companies including Houston’s Noble Energy, Royal Dutch Shell and Exxon, are inflaming tensions in an already volatile region now facing the huge influx of wealth that comes with being the world’s next big energy play.
Cyprus itself has been geopolitical tinderbox for decades, sparking a Turkish invasion in the 1970s that divided the island nation between ethnic Turks and Greeks and led to a United Nation’s peacekeeping mission that has lasted nearly a half-century.
“Turkey has shown a willingness to defend their interests even if it brings them into conflict with other countries,” said Bulent Aliriza, a senior associate at the Washington think tank Center for Strategic and International Studies. “This issue bears watching because I think there’s going to be trouble.”
Exxon Mobil, which went ahead with its plans, has so far avoided trouble. But the possibility of fighting breaking out in the Eastern Mediterranean has many in the oil sector worried.
On HoustonChronicle.com: In Guyana, Exxon project stirs international tensions
Charles Ellinas, the former CEO of the Cypriot National Hydrocarbon Co. and now a senior fellow at the Washington think tank Atlantic Council, said there is good reason for concern. Turkey is unlikely to interfere with American companies, lest it provoke the U.S. military. But it might disrupt the operations of the French oil company Total, which has partnered with Eni on its contract to drill in waters in the Cypriot waters claimed by Turkey, Ellinas said.
In addition, he said, the geopolitical uncertainty and potential for military action could make it difficult to find the financing needed to develop the offshore gas fields.
“This sort of situation is not conducive,” he said. “We can talk about international agreements and the U.N. But when it comes to major projects and billions of dollars in investment, can you tell me a bank that will put the money in when there is a political threat? We need a political solution.”
The boundaries of Cyprus, a 3,500-square-mile former British colony, have been under dispute since it won independence in 1960. Cypriots of Greek heritage and those of Turkish heritage battled for more than a decade before a coup d’etat by Greek Cypriot nationalists spurred the invasion by Turkey, which feared a union between Cyprus and Greece.
The invasion established the Turkish Republic of Northern Cyprus, which neither the United States, Europe nor the United Nations recognizes. The government, which is recognized only by Turkey, must operate under an international embargo that prevents flights from going anywhere but Turkey. Athletes from the Turkish Republic of Northern Cyprus are unable to play in international competition.
Their Foreign Minister Kudret Özersay traveled to New York and Washington earlier this month, as part of a diplomatic push to pressure oil companies to start negotiating with Turkish Cypriot officials. As it stands now, the official Cyprus government has agreed to split gas revenues with the Turkish Cypriots, but has not consulted with them on the development of the gas fields.
Ozeray said his government was considering legal action through international courts — though he declined to go into specifics — to force the Greek Cypriots and oil companies to bring them into the loop, but would prefer a “more reasonable and pragmatic approach.”
“The [international] decision-making process may take time. Diplomacy is process, not one meeting,” he said in an interview. “We try to show everyone it is worth it to think twice. Causing instability in the region may have repercussions for the foreign policy.”
Plenty is at stake for the oil sector as well.
At a time of middling natural gas prices and hesitation around large offshore projects, the huge volumes of gas in the Eastern Mediterranean have turned the region into one of the world’s hottest exploration areas, said Robert Morris, a senior energy analyst at the research firm Wood MacKenzie. Interest was sparked in 2009 with the Noble’s discovery of Israel’s Tamar field, estimated to hold more than 21 trillion cubic feet of gas.
On HoustonChronicle.com: Israel comes to Houston seeking partners to develop gas reserves
Then in 2012 Noble announced its Aphrodite field off the coast of Cyprus, holding 4.5 trillion cubic feet of gas. Three years later Eni announced the Zhor field off the coast of Egypt, with an estimated 21.5 trillion cubic feet of gas.
“A huge amount of gas has been discovered over the last 10 years,” Morris said. “They might be deep water wells, but in some of the fields you need to drill very few wells because the reservoir is so productive.”
Right now, all eyes are on Exxon’s exploratory wells off Cyprus, the results of which are expected to be announced in the weeks ahead. The Texas oil giant has already floated the idea of building a LNG export facility on Cyprus, should the wells prove as prolific as hoped.
And Israel, Egypt and Cyprus announced earlier this month they had formed a joint group to develop the infrastructure necessary to move gas out of the eastern Mediterranean, a region lacking in the LNG terminals and pipelines necessary to move gas to markets in Europe and Asia.
But the political issues around Cyprus and Turkey continue to cloud that promise. And considering the long history of conflict in the region — stretching back not just decades but centuries to the days of the Ottoman Empire — finding a solution will be difficult, said Aliriza, of the Center for Strategic and International Studies.
“You bring in the existing problems, a Syrian war, a Lebanese civil war, and then add energy, which always bring the potential for dispute,” he said. “The Eastern Med has a long history of dispute, and this is feeding off of that and adding new ones.”
Thanks Tisdal for the linky!!!