No quick fix for Cyprus

ROBERT ELLIS

Billie Holiday’s “What a Little Moonlight Can Do” is a popular evergreen, but now there is an update in the Eastern Mediterranean: “What a Little Gas Can Do.”

After John Kerry was taken off balance by Sergei Lavrov over Syria’s chemical weapons, the U.S. is searching for a comeback and Cyprus seems to fit the bill. Not that a solution to the 50-year-old conflict has any intrinsic value for the Americans, but because it is a key to unlocking the vast gas and oil reserves in the Levant Basin.     

In 2003, when the issue was the passage of American troops through Turkey to northern Iraq, the U.S. offered Turkey two incentives, several billion dollars in grants and loans and Cyprus, in the form of the Annan Plan. Now, with a new agenda, the U.S. has a second bite at the apple as facilitator for the start of a new, and hopefully final, round of unification talks.  

The other day, after a six-month silence, President Obama had a lengthy phone conversation with his chum and model partner, Prime Minister Erdoğan. In a discussion of regional and bilateral issues, the president thanked Mr. Erdoğan for, “his constructive role in the effort on Cyprus to renew negotiations for a settlement.”  

At the end of January, George Papadopoulos, senior consultant at the Hudson Institute, argued in Arutz Sheva that the U.S. should leverage its growing military ties with both Israel and Greece to repel Russian’s growing influence in the region. In his view, the discovery of the massive gas and oil deposits creates a natural nexus for an integrated energy zone between Jerusalem, Nicosia and Athens, which the U.S. can develop as a foundation for a military pact.

According to Papadopoulos, the rise of the AKP and its foreign policies have fractured the foundation of U.S. policy in the Eastern Mediterranean and created a vacuum for the return of Russia as a great power.

Nevertheless, Matthew Bryza, former U.S. ambassador to Azerbaijan and now board member of the Turcas Energy group, argues in Bloomberg for the construction of a 292-mile pipeline from Israel’s Leviathan field to Ceyhan in southern Turkey as the fix to resolve the standoff between Israel and Turkey.

At the same time, Bryza suggests the excess gas from the Leviathan field can be diverted to Cyprus to make the construction of an LNG terminal at Vassilikos financially viable. At present, this project has been shelved because of insufficient reserves in Cyprus’s Aphrodite field.

The major obstacle to a détente between Turkey and Israel is the unresolved Mavi Marmara issue and Erdoğan’s insistence that Israel first ends its Gaza embargo. Bryza recognizes an overall solution, including the Cyprus question, will require “intricate diplomatic choreography,” but believes the U.S. has a role to play. 

Cyprus has based its hopes of economic recovery on the exploitation of its hydrocarbon resources, but that path is fraught with difficulty. One prerequisite is a satisfactory outcome to reunification talks, to avoid a conflict with Turkey over the exploitation of the island’s energy resources. As an Israel-Turkey pipeline will pass through Cyprus’s EEZ, this will also entail Cyprus’s compliance.

However, further exploratory and appraisal drilling will have to take place in the Aphrodite field before it can be ascertained whether there is a credible basis for investing in a single LNG train to Vassilikos. Irrespective of the outcome, additional Israeli gas will only strengthen the viability of the project.

Energy specialist Dr. Theodoros Tsakaris, in an analysis of Turkish-Israeli relations and the strategic energy calculations of Greece and Cyprus, mentions that the political risk factor will play a prominent role in the decisions made by both governments and companies. A positive outcome to the Cyprus talks can only reduce this factor.

Robert Ellis is a regular commentator on Turkish affairs in the Danish and international press.