Page 5 - Euroil Week 04 2020

EurOil COMMENTARY EurOil
Glaucus-1, which was made by Exxon and Qatar Petroleum earlier this year and is ranked the third-largest gas discovery off the Cypriot coast.
It contains an estimated 682mn barrels of oil equivalent (boe) , of which about 90% is natural gas.
A large consumer of natural gas, Turkey is understandably interested in boosting its supplies from its own production rather than imports. The country is almost entirely depend- ent on gas imports, most of which come from Russia, Iran and Azerbaijan, although Turkey also buys LNG from a dozen exporters. Last year’s consumption is seen at some 44-44.5 bcm, down on 2018 because of unusually warm weather but still a consumption rate sizeable enough to prompt efforts to secure its own supply.
Ankara has dispatched warship-escorted drillships to drill targets to the east and west of the island nation, provoking international con- demnation and threats of sanctions from the EU.
The US State Department said on Wednesday that Washington remained “deeply concerned” over reports that Turkey was moving to drill south of Cyprus, urging Turkish authorities to halt the “provocative step that raises tensions in the region”. Washington also reiterated US support for Cyprus’s right to develop resources inside its EEZ.
But for Turkey it is not only a question of securing natural gas supply. The access to nat- ural gas goes hand in hand with Ankara’s recent geopolitical expansion in the Eastern Mediter- ranean. Earlier this month, President Erdogan announced a co-operation deal with the Lib- yan government that will see the opening of a maritime corridor between the two countries across the Eastern Mediterranean. The deal also
included stipulations about joint oil and gas exploration. The EU and Cyprus have criticised the deal.
The contentious maritime co-operation deal with Libya signed late last year was followed by President Erdogan saying that Ankara would begin offering licences for hydrocarbon explo- ration and drilling in areas of the Mediterranean claimed by Turkey under the controversial pact with Libya.
The maritime co-operation agreement was signed with Libya’s Tripoli-based Government of National Accord (GNA) last November last and grants Ankara rights to large swathes of the eastern Mediterranean. Greece, Cyprus and Egypt have condemned the treaty, and Athens has threatened to withdraw support from any future Libya peace deal if the pact is not cancelled.
Turkey’s expansion in the region also con- cerns Israel. Earlier this month, Israel, Cyprus and Greece signed a deal that would see natu- ral gas from the Israeli offshore deposits flow to Europe. The EastMed pipeline will not only boost Israel’s role as an energy supplier to Europe but also enhance the importance of Greece and Cyprus as “key links in Europe’s energy supply chain,” according to the Times of Israel.
This is at odds with Turkey’s expansionist pol- icies and the traditional, historically determined mutual hostility between Ankara, Athens and Nicosia. Taken together, Erdogan’s vision of a new Ottoman empire and the need to secure the long-term supply of natural gas will likely con- tinue to keep tensions running high.
Turkey insists that its drilling activities fall within its own continental shelf and are also part of a deal with Turkish Cypriots, whose self-declared republic is recognised only by Ankara. ™
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