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Cyprus, Turkey At Odds Over Natural Gas Drilling

The tiny eastern Mediterranean country of Cyprus is expected to become the fifth eurozone nation to receive a bailout. But the island-nation, which is about half the size of Connecticut, could soon access a massive treasure under the sea: natural gas.

If all goes well, Cyprus could start making more than $25 billion a year — about the same as the country's current GDP — starting as early as 2015, says Solon Kassinis. Twenty years ago, few listened to the engineer when he said there was gas and oil under the seabed.

"A lot of people, especially geologists, geophysicists, they didn't believe in the region. They didn't think that there was oil and gas," he says.

But Kassinis, who's now the energy chief of Cyprus, insisted the conditions for gas and oil deposits — such as a thick sedimentary basin and sea steam — were there.

Houston-based Noble Energy listened. Its engineers surveyed the area in 2008, and the company began exploratory drilling in 2011. The company worked on a block of the seabed called the Aphrodite gas field, located off the southern coast of Cyprus, says Fiona Mullen, an economist following the project.

"Noble Energy did the drilling in September, and they announced in December that they had found an estimated 7 trillion cubic feet, which is enough to supply domestic consumption for something like 200 years," Mullen says. "So there's obviously spare for export."

Troubled Politics

But there's also a complication. Cyprus has frigid relations with its neighbor, Turkey, which has even threatened military action to stop the drilling.

"Turkey's particularly sensitive about the area to the west of the island, because they claim some blocks there belong to its own continental shelf," Mullen says. "With the Aphrodite field, its argument is not as aggressive. Turkey says Greek Cypriots don't have the right to govern the Republic of Cyprus alone. They ought to govern with the Turkish Cypriots."

Turkey has occupied the northern half of Cyprus since 1974. The division has embittered Greek and Turkish Cypriots, whose leaders tend to marinate in that difficult past, says Ergun Olgun, a former presidential adviser to the Turkish Republic of Northern Cyrprus, which is only recognized by Turkey.

"Hydrocarbons can be a curse or a kismet," Olgun says. "The key to it not becoming a curse is to understand that we are interdependent. Interdependence means respecting each other, but that can only happen if we break from the past."

Olgun says Greek Cypriots rejected a Turkish Cypriot plan to resolve the country's division before moving forward on hydrocarbons exploration.

"Instead what we have is new alliances being built around Cyprus, which are making the conflict even more dangerous," he says. "The alliances, for example, with Cyprus and Israel, [and] Turkish Cypriots and Turkey deepening their own alliance by going into agreements with other."

Not Just Economic Calculations

Cyprus could save a lot of money by piping the gas directly to Turkey, which could, because of its proximity, be its biggest customer. Instead the Greek Cypriots plan to liquefy the gas and partner with Israel on a pipeline.

Israel has fragile relations with Turkey, which is now drilling for oil on land in the plains of northern Cyprus.

Supervisor Cem Cetin says his team arrived earlier this year at a drilling site for the state-owned Turkish Petroleum Corporation.

"We import oil and gas from other countries," Cetin says. If the company finds hydrocarbons, he adds, "We are going to share with Turkish Republic of Northern Cyprus."

You can see the Turkish Petroleum rig from the nearby village of Sinirustu, where Turkish farmer Sabri Aydag has lived since 1976. Before 1974, most of the people who lived here were Greek. The Greek Cypriots still call the village Syngrasis.

"The drilling will improve the village, since Turkish Petroleum has already given farmers 700 fields," Aydag says. "This village will turn into a proper town."

Turkey is also planning to drill offshore, just like everyone else in the region, says Praxoula Antoniadou-Kyriakou, a Greek Cypriot and a former energy minister.

"The whole of the eastern Mediterranean [is] loaded with hydrocarbons," she says. "Israel, Egypt, Cyprus and Lebanon now contemplate ... exploration."

If the countries can put the past behind them and work together to manage hydrocarbons, she says, the region could become a place of peace and prosperity.

But the history here feels thicker than the seabed, she says. And it's far more explosive than the gas that lies beneath.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

Source: NPR [http://www.npr.org/2012/11/23/165754318/cyprus-natural-gas?ft=3&f=1003,1004,1007,1013,1014,1017,1019,1128]

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