Monday, September 19, 2011

Cyprus Drilling Rig to be Blocked by Turkey....

Mother Nature played havoc with geopolitics this week. We in India were consumed by the Sino-Indian spat over Vietnam’s claim to prospect for oil in the South China Sea. Moscow was livid that the European Union said this week it proposed to mediate between Azerbaijan and Turkmenistan to lay a gas pipeline under the Caspian Sea notwithstanding the dispute over its status among the littoral states (Russia, Kazakhstan, Turkmenistan, Iran and Azerbaijan). But the tensions building up in the Eastern Mediterranean trump the other two maritime disputes.

It centres around the discovery of anywhere up to 120 trillion cubic feet of gas deposits (equivalent to half of US’s reserves) in the Levant Basin that comprises Israel’s offshore as well as of Lebanon, Cyprus and Syria - and the Palestinian territories. The reserves make Israel potentially one of the wealthiest countries on the planet.

However, there are problems looming ahead — much, much bigger than what ONGC Videsh might come across in South China Sea. Israel’s maritime boundary with Lebanon is in dispute and the two countries don’t have diplomatic relations; Palestinians stake claim for the natural resources; Syria is in turmoil; and Cyprus is a divided nation.

Enter Turkey. Ankara has demanded Nicosia has no right to press ahead with exploration work (awarded to the US major Noble Energy which is also working for Israel) but the Greek Cypriot government is nonchalant as it has friends everywhere, especially in Washington and Athens. Turkey says it will prevent exploration work from going ahead. On Thursday, it announced it is going to have an agreement with the Turkish-Cypriot government whereby Turkey will undertake its own exploration work in the Cypriot waters. Turkey’s ties with Israel are already at a low point with Ankara threatening to challenge Israel’s blockade of Gaza.

The Eastern Mediterranean, like South China Sea, is witnessing a realignment of regional countries. Greece and Cyprus have drawn close to Israel almost overnight to challenge Turkey’s muscle-flexing in the Eastern Mediterranean. Greece is replacing Turkey as Israel’s military partner. Nicosia threatens to stall Turkey’s accession talks with the EU. Israel darkly hints it may support the Kurdish insurgents in Turkey’s eastern provinces.

The US president Barack Obama is meeting Turkish and Israeli PMs on the sidelines of the UNGA in New York. Obama is expected to knock the Turkish and Israeli heads together and explore how it looks. Unlikely, though, there could be a Turkish-Israeli reconciliation anytime soon. Oil and gas add a highly combustible dimension to the discords that tear apart Eastern Mediterranean. Saner voices in Turkey , are counseling the government to be cautious — not to rush in where angels fear to tread.....

Cyprus Drilling Rig to be Blocked by Turkey....

Turkey is ready to send an exploration rig, accompanied by a warship, to claim its rights off Cyprus, a Turkish official says...., Turkey's "Double Speak" is becoming tooooo obvious for the whole world to see...

Tension between Turkey and Greek Cyprus is moving toward crisis in the eastern Mediterranean Sea with Ankara’s announcement of plans to send an oil and gas exploration rig to the already unstable area, accompanied by a warship. “We have accomplished all preparatory work. We are ready to finalize the agreement [with Turkish Cyprus] to begin the process and send our platform off the Cyprus coast,” a Foreign Ministry official told the Hürriyet Daily News on Sunday.

The statement followed news that Texas-based Noble Energy, operating under license from the Greek Cypriot government, had moved its drilling rig into position over the weekend. It is expected to start work soon on a block southeast of the island.

The Greek Cypriot initiative pushed Turkey and Turkish Cyprus to announce their own action plan in retaliation. Under the plan, the Turkish Petroleum Corporation, or TPAO, will be licensed by Turkish Cyprus to launch exploration and drilling activities in the disputed area. A senior Energy Ministry official was in Nicosia on Sunday to review the current state of agreement, which will likely be signed within days if the Greek Cypriot administration does not retreat from its position.

“We will be very cautious in this process; all our steps will be taken as retaliation and [in response] to Greek Cypriot moves,” the Foreign Ministry official said. Noting that Foreign Minister Ahmet Davutoğlu will meet with U.N. Secretary-General Ban Ki-moon in New York this week, the diplomat said Turkey will try all diplomatic channels to avert this crisis. “If we cannot succeed, there will be no room left for us other than to retaliate,” the official said. The Greek Cypriot drilling plan will also kill off the U.N.’s plan to reunify the divided island, Davutoğlu said Sunday. “The Greek Cypriots are intending to sabotage the talks, to change the nature of existing ties by the way of provocation,” he said, warning that such unilateral actions would doom the island to permanent division. “If they claim they have their own area where they can do whatever they want, then, by implication, they accept that the [Northern Cyprus] has its own area as well. This is a shift to a two-state mentality.”

If the Greek Cypriots begin drilling, Davutoğlu added, Turkey and northern Cyprus will respond by signing a continental shelf delimitation accord to pave the way for their own exploration and “the two-state prospect will further deepen.”

Davutoğlu said he discussed the latest tensions with the U.N. envoy in Cyprus, Alexander Downer, and was planning to hold further talks with Ban in New York this week. Turkish Deputy Prime Minister Beşir Atalay meanwhile said late Saturday that Turkey will freeze its relations with the European Union if Cyprus takes over the union’s rotating presidency next year before a solution is reached on the divided island. “If the negotiations [on Cyprus] do not end positively and the EU hands over the presidency to southern Cyprus, the main crisis will be between the EU and Turkey. Because then we will freeze our relations with the EU,” the Anatolia news agency quoted him as saying.

Drilling has begun in Cyprus’s Block 12 license. Noble Energy: If we find gas, development can be complete by 2014.

19 September, Amiram Barkat

US company Noble Energy Inc. (NYSE: NBL) has started drilling in Cyprus’s Block 12 license. At the start of the month, the Turkish government threatened to send the Turkish navy to Cyprus if the latter continued with its plan to drill at the location. However, Noble Energy, a partner of Israeli companyDelek Group Ltd. (TASE: DLEKG), began drilling today, ten days before the end of the period stipulated in the agreement between it and the Cypriot authorities.

The Block 12 license is located north of the Israeli licenses owned by Noble Energy, Delek, and Ratio Oil Exploration (1992) LP (TASE:RATI.L) where the Leviathan oil field is located. Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each hold an option on 15% of the rights in Block 12. The exercise of the agreement is still subject to receiving final permission from the Israel Securities Authority, as well as from Cypriot authorities.

The drilling in Block 12 is an exploratory drilling to verify the findings of the three-dimensional survey that Noble Energy conducted last year. Cypriot Energy Service director Solon Kassinis told “Globes” last week that he believes that they will discover a gas field at least the size of the Tamar field at this location. In an interview with “Globes”, Kassinis spoke about the possibility that the Israeli Navy could protect Block 12, which he says is only 33 km from the Leviathan oil field.

According to Noble Energy, if gas is in fact discovered at this location, it will be possible to complete its development by 2014, only one year after Tamar is expected to begin operating. Drilling in Block 12 is being carried out by the Homer Ferrington rig. Upon its completion, the rig is due to complete finish the development of Yam Tethys’s Noa reservoir. At the beginning of 2012, the Homer Ferrington is due to engage in exploratory drilling in the Sarah and Myra wells owned by Hachshara Energy and Modiin Energy LP (TASE:MDIN.L) among others....

Turkey threatened Monday to start oil and gas exploration in the eastern Mediterranean next week if the Greek Cypriots press ahead with drilling plans.

“If Greek Cyprus sticks to the timetable it announced previously, we will start drilling activity next week,” Energy Minister Taner Yildiz told reporters.

Cyprus made a deal with US energy firm Noble, which is expected to start exploratory drilling off the island before next month.

Yildiz called on Cyprus “to hold immediately” those plans, failing which Turkey would retaliate.

He said an agreement was signed with a Norwegian company for seismic drilling off the island, but he declined to name it.

“First of all, we will start exploration with one vessel,” he said, adding that the Turkish navy may escort drilling ships in the eastern Mediterranean.

Turkey has repeatedly called on the internationally recognized Republic of Cyprus to postpone its gas exploration, saying the Greek side has no right to do so while the island remains split, thus leaving the Turkish north out of the picture.

Yildiz said that “depending on the developments, Turkey could sign a continental shelf agreement” with the Turks of the divided island....

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