EurActiv.com

EU news and policy debates across languages

01/09/2016

Gas row looms large over divided Cyprus

Energy

Gas row looms large over divided Cyprus

gas-cyprus1.jpg

Turkish Cypriot leader Dervi? Ero?lu said yesterday (25 September) he would present a new plan to the UN secretary-general for gas explorations surrounding the divided island, resources that could change its economic landscape.

"I am planning to present a plan to the secretary-general, a proposal, a new one on the gas exploration and exploitation of hydrocarbon reserves," Ero?lu said through a translator of his scheduled Saturday meeting with Ban Ki-moon.

Ero?lu, speaking in the unrecognised nation's offices housed within Turkey's mission to the United Nations, would not provide details when pressed about his ideas.

Northern Cyprus signed an agreement with state-run Turkish Petroleum Corporation, or TPAO, in April to launch onshore exploratory drilling.

In the next five or six months, TPAO is expected to start drilling offshore to see if it can find gas deep in the eastern Mediterranean, said Ero?lu, who was in New York for the United National General Assembly meeting.

The island has been divided since 1974, when the Turkish military invaded after a short-lived Greek Cypriot coup engineered by the military junta then in power in Athens (see background).

Turkey was outraged last year when the internationally recognised government of Cyprus, led by Demetris Christofias, licensed Texas-based Noble Energy to explore an offshore block for natural gas in what it said was one of the biggest finds in years.

If the gas discovered by Greek Cypriots is proven reliable, it could end their dependency on energy imports and make them self-sufficient for decades.

"I have already warned Mr Christofias at the table that if you start your drilling activities, then we will engage in our own drilling activities in the waters around Cyprus," Ero?lu said.

After the announcement between Nicosia and Noble Energy, Ankara dispatched naval ships to accompany its own seismic research vessel to explore in waters 10 kilometres from the Cyprus drill site.

Cyprus holds the rotating presidency of the EU through the end of the year.

Hydrocarbons could provide financial relief to both sides of the divided island.

Isolated North

The Republic of Cyprus was forced to seek aid from the International Monetary Fund and the EU in June to prop up it banks, which were badly exposed to debt-crippled Greece.

Turkish Cypriots living north of a buffer zone are economically and political isolated, relying on financial handouts from Ankara.

Turkey still keeps about 30,000 troops in the north and is the only nation that recognises the self-declared Turkish Republic of Northern Cyprus.

Greek and Turkish Cypriots agree in principle on reuniting the island as a federation but differ on how it would work. Their lack of progress forced Ban to scrap plans in April for an international conference on Cyprus.

Ero?lu's intention to bring a gas exploration plan to Ban is aimed at reviving negotiations.

Ero?lu said he proposed using whatever is earned from any gas or oil to finance a reunification settlement.

"That under the secretary-general's direction there should be an escrow fund for collecting this revenue so that it could be used for financing the settlement," Ero?lu said.

Direct talks between the leaders of the Greek and Turkish Cypriots have been on hold for several months, partly because of a Greek Cypriot poll in 2013 to elect a new president and their EU presidency.

Background

Cyprus has been divided since 1974 despite repeated efforts under the auspices of the UN to bring the leaders of the Greek and Turkish Cypriot communities to the negotiating table. 

Hopes for reunification were raised in 2002 when then-UN Secretary-General Kofi Annan suggested a two-part federation with a rotating presidency. 

In an April 2004 referendum, the Greek Cypriots rejected - and the Turkish Cypriots approved - a UN-sponsored unity plan. The plan's failure disappointed EU officials, who had agreed to allow Cyprus to join the EU that year partly in the hope that doing so would encourage a solution. In May 2004, the Greek Cypriot-controlled Republic of Cyprus became a full member of the EU.

At their December 2004 summit, EU leaders agreed to open accession talks with Turkey on 3 October 2005. One of the conditions specified was for Ankara to extend a 1963 association agreement with the EU's predecessor, the European Economic Community, to the Union's 10 new member states. This group included the Greek Cypriot state, which is not recognised by Turkey.

In July 2005, Turkey signed a protocol extending its customs union to the EU-10 states, but at the same time Ankara issued a declaration saying that its signature did not mean it had recognised the Republic of Cyprus. Turkey also refused to open its ports and airports to Cyprus, as it claims the EU has fallen short of having direct trade with the unrecognised northern part of the island.

Further Reading