SNAPSHOT: GEOPOLITICAL TENSIONS ESCALATE IN MEDITERRANEAN AS TURKEY ADMITS DRILLING FOR OIL AND GAS OFF CYPRIOT COAST

SNAPSHOT: GEOPOLITICAL TENSIONS ESCALATE IN MEDITERRANEAN AS TURKEY ADMITS DRILLING FOR OIL AND GAS OFF CYPRIOT COAST

The EU has threatened sanctions against Turkey following its decision to begin drilling operations for oil and gas off Cyprus’s coast in June.

KEY POINTS

  • Despite calls by the EU and US to defuse tensions in the Eastern Mediterranean, on 18 June Turkey’s government confirmed it has been drilling for oil and natural gas in Cyprus’s exclusive economic zone (EEZ). This has been conducted by the Fatih, a drillship that has been anchored 65km from the west coast of Cyprus since May. Another drillship was sent east of the island to conduct offshore exploration on 20 June.
  • While consistent with Ankara’s aim that it would conduct exploration after large hydrocarbon reserves were discovered in Cyprus’s EEZ – which Turkey claims, the development marks a clear escalation. On 16 June, President Recep Tayyip Erdoğan said that Turkey ‘will continue to search in those areas that are ours’.
  • This takes place in the context of deteriorating US-Turkey relations and a politically weakened ruling party in Turkey, both of which help explain Ankara’s actions.
  • Highlighting its limited options, the Cypriot government threatened to issue international and European arrest warrants ‘for all involved’ in what it considers is the illegal drilling for oil and gas in its EEZ. Arrest warrants were already issued for the crew of the Fatih in May.

ANALYSIS

  • Turkey’s drilling activity in Cyprus’s EEZ is driven by internal and geo-political considerations. Domestically, President Recep Tayyip Erdoğan has become politically weakened following mayoral elections that led to the president’s AK party losing control of the capital Ankara to the opposition CHP party. Results indicated the AK had also lost commercial hub Istanbul; however, Turkey’s election board annulled that vote over alleged irregularities. A rerun takes place on 23 June. These developments have amplified existing criticism of the government amid an ongoing currency crisis. Aggressive rhetoric and actions over drilling activities in the Eastern Mediterranean are likely part of a concerted effort to galvanise nationalistic sentiment at home and divert attention to national interests abroad.
  • A defiant Turkey also sends a signal to the Cypriot government – and by extension other countries in the region, such as Greece and Israel – that it will seek prevent (or crowd out) other exploration efforts in the island’s EEZ, while seeking to stake its own territorial claims. In February 2018, the Turkish navy prevented a ship chartered by Italy-headquartered oil and gas multinational Eni from drilling in a block south-east of Cyprus, forcing the company to abandon the operation.
  • On the macro level, Ankara’s actions can also be explained through the state of current US-Turkey relations. These have steadily worsened in recent years, partly due to diverging foreign policy priorities. Areas of contention include the US’ reluctance to extradite Fethullah Gülen, the de facto leader of the Gülen movement, which Ankara holds responsible for a failed coup attempt in 2016, and the US government’s support of the YPG, Kurdish militia in northern Syria. Turkey considers the YPG a terrorist group with close links to the banned Kurdistan Workers’ Party (PKK). Washington is also unhappy about Turkey’s increasingly close relations with Russia. US officials have urged Ankara to drop plans to buy the Russian S-400 air defence system, claiming this will pose a risk to NATO’s integrated defence systems. For Washington, the deal, which will see the first missiles arriving in Turkey in July, raises wider questions about Ankara’s commitment to the alliance.
  • Cyprus has no navy to deter potential violations of its territorial waters. Retaliatory options are limited to diplomatic pressure through the EU and legal recourse, through issuing arrest warrants. While the warrants are unlikely to discourage Turkish Petroleum Corporation, the state-owned energy firm conducting the exploration, they are likely to limit foreign involvement. Under Cypriot law a company operating within the EEZ without approval faces fines of over EUR1 million, while individuals involved could face five-year prison terms.
  • The EU could respond by halting membership talks with Turkey, end talks on upgrading the customs union it has with the country and cut pre-accession financial assistance. But the EU’s reliance on Turkey on security and migration issues acts as a strong disincentive for tough action, as this could jeopardise a 2016 deal to restrict the flow of migrants into the EU via Turkey.
  • However, the possibility –although unlikely – of armed confrontation in the region would escalate the EU’s response. Early indications of potential confrontation would include military mobilisation by Greece – under the guise of protecting Cyprus’s territorial integrity – or by Turkey. A robust EU response, possibly involving all the above sanctions would almost certainly follow.

OUTLOOK 

  • Regional tensions in the Eastern Mediterranean will remain high, but repeated violations of Cyprus’s EEZ and the expansion of drilling operations by Turkey would test the EU’s resolve for a unified response. The EU would likely maintain a measured and cautious approach, probably in the form of strongly worded statements condemning Ankara’s’
  • A clear escalation by Turkey however, through an armed confrontation, would prompt the EU to respond through sanctions, dealing a blow to Ankara’s aspirations to join the bloc.
  • Diplomatic pressure from the US will also have limited impact, due to the already poor relations with Turkey. These are set to worsen with the delivery of a Russian missile defence system to Ankara.Businesses with operations and interests in the Eastern Mediterranean will continue to face both operational- and strategic-level risks. Further attempts by Turkey to disrupt exploration efforts will incur significant costs for businesses, particularly firms which have acquired exploration licences in blocks within Cyprus’s territorial waters.