Is the new Cyprus-Greece-Israel energy triangle casting a net for Turkey?

GEORGE STAVRIS

Long-running speculation over massive natural gas reserves in the tumultuous Southeastern Mediterranean and Cyprus’ Exclusive Economic Zone (EEZ) became a reality in December 2011 when official research and scope reports were released.

Today, the Republic of Cyprus finds itself grappling with this mixed blessing. These rich findings can provide long-term benefits for the country but Cyprus is more like a novice treading a very slippery floor in the major leagues of global diplomacy.

A new but familiar player, the state of Israel, has made a thunderous entry into the traditionally loud trio of Greece, Cyprus and Turkey, causing significant ruptures to the balance of the neighborhood. The event that sparked Israel’s newfound interest in Cyprus was the definitive signs of massive natural gas reserves in Cyprus’ Plot No. 12 (fittingly codenamed “Aphrodite”), right next to Israel’s own EEZ and massive reserves in its “Leviathan” plot.

It became apparent right from the start that Israel naturally considered every issue as highly imbued with its own national interest. Thus the decision to collaborate in treating the extracted natural gas and then transporting it to Europe (from both countries’ plots) came as a complete formula: pipelines would be part of a joint network, a vast specialized storage terminal, valued at 10 billion euros and funded almost completely by Israel. They would be built at the Vassilikos port near Limassol and the majority of the approximately 10,000 highly skilled personnel needed would be Israelis. Naturally, additional issues have come up in the logical process of things. The project will take about six or seven years to complete and inevitably the thousands of Israeli personnel engaged in it will need to have their families near them, so the total number of Israelis in Cyprus would become even greater, at least 15,000. These Israeli citizens will need to be housed in safe and secure conditions near the working site. Any analyst can easily run the math on the size and nature of this security force.

The U.S. took a particularly open stance regarding the recent natural gas reserve discovery and Turkey’s attempted involvement in this on behalf of the Turkish Cypriots resulting in a new row with the Republic of Cyprus (RoC), which allows exclusive rights to the RoC until the age-old “Cyprus Problem” is resolved.

Russia has its own worries over the new order of things in the wider Middle East. The discovery of natural gas reserves in Cyprus, its closest ally in the EU and a traditionally friendly country since the Soviet era, presents Russia with the rare opportunity of hitting many birds with one stone.

The European Union is now fortunate enough to see a full member (including of the eurozone) with massive natural gas reserves (and possibly oil) sufficient to supply it for many years, thus removing the EU from the uncomfortable position of receiving gas from pipelines in Russia and Turkey.

If one considers the complex combinations of possibilities that could take place and the endless array of scenarios, most of them having to do with the behavioral traits of the actors in play, the formation of the Cyprus-Greece-Israel NET vis-à-vis Turkey and the tumultuous environment in which all this is taking place, one can understand what a huge and complex project management challenge this is.

Cyprus is in the process of being bailed out by the Troika with onerous commitment terms and also has to be realistic about how the advent of natural gas reserves can do more for it than just fix its finances. Natural gas and perhaps oil should be used intelligently in the search for a permanent and viable solution to the “Cyprus Problem” and not as a weapon to solidify the Greek Cypriots’ standing in a never-ending confrontation with Turkey. Obviously, economics can play a growing and positive role in the quest for a solution. Ironically, after a solution, Turkey could act as a trading partner to such an extent that Cyprus would not need to have substantive others.