Peace Talks Resume in Cyprus Amid Plans to Develop Aphrodite
UN-led peace talks aimed at reunifying the ethnically divided island of Cyprus have resumed in Cyprus. President Nicos Anastasiades and the newly elected Turkish Cypriot leader Mustafa Akinci met in Nicosia to discuss a possible resolution for the division of Cyprus. Negotiations were interrupted in October of last year after a NAVTEX was issued by the Turkish government announcing its plans to carry out exploration activities in Cyprus’ Exclusive Economic Zone, already licensed through international bidding.
The discovery by Noble Energy of the Aphrodite field in Block 12 of Cyprus’ Exclusive Economic Zone in 2011, estimated at 4.54 Tcf, and the possibility of the existence of large deposits of hydrocarbon in Cyprus EEZ, have added a complicating element to the discussion between the Greek and Turkish Cypriots for fear that gas revenues will only benefit one community. The Greek Cypriot government has repeatedly stated that gas discoveries off the island’s coast will benefit both parts of the island, against Turkish Cypriot allegations that unilateral explorations violate the rights of the Turkish Cypriots living in the northern part of the island.
The resumption of the talks brings new hopes that 2015 may bring a sustainable solution for the island of Cyprus. Divided since 1974 when Turkey invaded the north in response to a military coup on the island backed by the Athens government, hopes of a settlement diminished through the years. The commercialisation of the natural gas encountered in Cypriot waters could significantly boost the Cypriot economy, severely hit by a financial crisis in 2013. The prospects linked to such gas developments could play an important part in moving forward the peace talks.
Cyprus is located in one of the world’s most contentious regions; neighbouring Lebanon and Israel, also in the process of searching for natural gas - with Israel now in the stage of finalising export solutions - are in a state of war and have a pending dispute over maritime borders. The complicated geopolitics of the Eastern Mediterranean constitute a significant hurdle for the effective development of the natural gas discovered in the Levant basin. Once fully dependent on imports to satisfy domestic demand, the recent discoveries could allow the interested parties to achieve natural gas independence, and eventually become net natural gas exporters if sufficient quantities are discovered to allow for the necessary infrastructure.
Cyprus faced important disappointments in the recent months with ENI failing to discover any recoverable amount of natural gas following two drillings in Block 9 of the island's EEZ, and TOTAL contemplating a withdrawal from the island for not having identified drillable prospects. The government of Cyprus is now working closely with Noble Energy to progress the development plan for the Aphrodite field. Cyprus may be exporting some of the gas discovered off its coast to its Egyptian neighbour undergoing a severe energy crisis compelling it to look for regional suppliers of natural gas.
Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. Karen is also a co-founder of the Lebanese Oil and Gas Initiative (LOGI). She holds an LLM in Commercial Law from City University London and a Bachelor of Laws from Université Saint Joseph in Beirut. Email Karen karen@minoils.com Follow her on Twitter: @karenayat
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