Turkey fuels regional power game over Mediterranean gas reserves

Europe’s top diplomat smiled for the camera as he took a helicopter flight over the disputed waters of the island of Cyprus at the end of June. Strapped in next to the Cypriot defence minister, Josep Borrell was signalling his support for the island and its allies in a bitter dispute with Turkey over access to the region’s huge gas reserves.

Beneath them, the Turkish drill ship Yavuz was stalking a drilling block licensed to the French and Italian oil companies Total and Eni — a commercial agreement that Ankara views as invalid. Turkey’s pro-government press decried Mr Borrell’s chopper ride as an “ugly provocation”.

Yet Ankara itself is also being accused of behaving in a provocative way. Under the direction of President Recep Tayyip Erdogan, Turkey has adopted an increasingly assertive response to being excluded from regional efforts to exploit the area’s gas resources, which are subject to claims from at least eight countries ranging from Libya to Egypt and Israel. The interventions threaten billions of dollars of investment as countries seek to boost their energy security. 

“We are tearing up and throwing away the maps of the Eastern Mediterranean that imprison us on the mainland”, Mr Erdogan’s deputy, Fuat Oktay, declared in June. 

Map showing the dash for gas in the Eastern Mediterranean

The region has the potential to become one of the last great fossil fuel plays — with bountiful gas to supply energy-poor countries around the basin, with enough left over to export. Having been under-developed and under explored for decades, the discovery of huge natural gas deposits in the past 10 years has created the potential to transform energy supplies in the region, and forge alliances between countries that might once have seemed unthinkable.

Egypt and Israel are collaborating. Greece, Cyprus and others believe they can exploit a gas bounty that will help wean their economies off more highly polluting fuels like coal. The initial target is to provide the fuel to drive Egypt’s growing economy. Longer-term, some energy executives believe they will be able to pump gas supplies into southern Europe, reducing the region’s reliance on Russia. 

But Turkey — excluded due to its fraught relations with many of the other players in the region — could stymie those ambitions. Mr Erdogan has responded to being left out of his neighbours’ co-operation by sending the Turkish navy to intimidate drill ships belonging to international oil companies and dispatching his own exploration vessels.

What began as a dispute between Turkey and Cyprus is fuelling a regional power game, drawing in nations as far away as the Gulf, and causing deep unease in the EU and the US. The latest flashpoint is Libya, where Turkey this year expanded its military presence after sealing an agreement with a UN-backed government in Tripoli that could enable Ankara to drill for oil and gas off the Libyan coast.

Josep Borrell, Europe’s top diplomat, on a helicopter flight with Cypriot politician Savvas Angelides over the disputed waters of the island of Cyprus at the end of June Josep Borrell, Europe’s top diplomat, on a helicopter flight with Cypriot politician Savvas Angelides over the disputed waters of the island of Cyprus at the end of June © Savvas Angelides/Twitter

Turkey’s open intervention into the North African Opec member’s conflict has put it at risk of a direct confrontation with Egypt, the United Arab Emirates and Russia, which back a renegade Libyan general fighting the Tripoli-based administration. 

“It has built into a big strategic issue,” says Dorothée Schmid, an expert on Turkey at the French Institute of International Relations, a Paris-based think-tank. Ankara, she says, is seen by many in Europe as “a very aggressive player that is waging war in several parts of the region and is behaving very aggressively against the EU”.

The decision to send Turkish drill ships and frigates into disputed waters is characteristic of the more muscular foreign policy vision pursued by Mr Erdogan in recent years that has unsettled Turkey’s traditional allies and alarmed its regional foes.

“Erdogan and some of his allies believe that Turkey is restoring its importance in the eyes of its western allies,” says Ozlem Kaygusuz, an associate professor of international relations at Ankara University. “They believe that the more Turkey plays an assertive role, the more it will become valuable and impossible to ignore for western interests in the region.”

Top row: Greek Prime Minister Kyriakos Mitsotakis (C), Israel’s Benjamin Netanyahu (R) and Cypriot President Nikos Anastasiadis. Bottom row: from left, Cypriot Energy Minister Yiorgos Lakkotrypis, Greek counterpart Kostis Hatzidakis and Israeli Energy Minister Yuval Steinitz, sign an agreement for the EastMed pipeline project in January Top row: Greek Prime Minister Kyriakos Mitsotakis (C), Israel’s Benjamin Netanyahu (R) and Cypriot President Nikos Anastasiadis. Bottom row: from left, Cypriot Energy Minister Yiorgos Lakkotrypis, Greek counterpart Kostis Hatzidakis and Israeli Energy Minister Yuval Steinitz, sign an agreement for the EastMed pipeline project in January © Aris Messinis/AFP

Anthony Skinner, director of Middle East research at the consultancy Verisk Maplecroft, believes that Ankara would ultimately like to reach a negotiated deal with Cyprus that could unlock the broader regional conflict — but that talks are probably years away. Until then, he says, the waters of the Eastern Mediterranean are likely to remain choppy. “Erdogan’s penchant for brinkmanship and pulling back just before it gets really dangerous means there’s always a risk of escalation.”

Regional confrontation

The Eastern Mediterranean dispute has its roots in the long-running conflict over Cyprus, which has for almost 50 years been split between a Greek Cypriot south and a Turkish Cypriot north. Ankara sees itself as the protector of the Turkish Cypriot population — and is the only nation to recognise their enclave as an independent state. 

Turkey first grew alarmed in the late 2000s when, after gas finds in the region by Israel, Cyprus hired energy groups to begin hunting for hydrocarbons in the area around the island. In December 2011, the US company Noble Energy announced the discovery of “significant natural gas resources”. Four years later Eni unearthed the supergiant Zohr field in Egyptian waters, which holds an estimated 850bn cubic metres of gas, rapidly developing it with partners and showing the region’s potential.

At the time, Demetris Christofias, then president of Cyprus, hailed the Noble discovery as a “historic development”. He added that the find could be “a tool for the promotion of peace and co-operation in the region”. 

But successive rounds of Cypriot peace talks failed and the dispute over gas has grown into a regional confrontation.

A drilling platform near Larnaca port in Cyprus A drilling platform near Larnaca port in Cyprus © Petros Karadjias/AP

On one side is Turkey and Northern Cyprus. On the other is Cyprus, Greece, Egypt and Israel, as well as the UAE and France — which in February deployed its Charles de Gaulle aircraft carrier to the Eastern Med in a show of support for the Total-Eni consortium in the face of Turkish pressure.

Cyprus says that its drilling for hydrocarbons in the waters around the island is backed by international law, citing the exclusive economic zone that it declared in accordance with a 1982 UN convention on the law of the sea that has been ratified by 167 countries as well as the EU. But the determination of Nicosia to plough ahead despite the lack of a peace deal has angered Turkey, which is not a signatory to the UN convention and objects to its rules. Ankara claims that Cyprus is both impinging on Turkey’s continental shelf and violating the rights of the island’s north.

Turkey’s deteriorating relations with many of the countries adjoining the Eastern Mediterranean over the past decade offered an opportunity for Cyprus. And it acted as a spur to co-operation between Israel and Egypt. Along with Greece, they forged a joint plan to extract and export gas from the region that bypassed Turkey. And last year, they were joined by Italy, Jordan and the Palestinian Authority that runs the West Bank in establishing an official East Mediterranean Gas Forum. 

Among the group’s grandest plans is a pipeline to create a new export market for the region’s gas by piping it to Greece. But the scheme has long faced scepticism due to the challenges of a route that stretches almost 2,000km through deep water. And with gas prices depressed due to a global supply glut, the cost of moving the gas that distance may be enough to make it economically unviable.

“It’s not clear that Europe [even] needs this gas as it already has supplies from Russia, Algeria and Norway,” says Jean-Baptiste Bouzard at the consultancy Wood Mackenzie. A more realistic aim, he adds, is to supply gas to Egypt and “perhaps utilise the country’s liquefied natural gas terminals for additional exports”.

‘Pirate state’

Increasingly isolated, Turkey has sought to disrupt the activities of the oil companies that were drilling under licences issued by Cyprus. In early 2018, Turkish warships blocked an Eni rig drilling off Cyprus — the first of several such episodes. Claudio Descalzi, the Italian company’s chief executive, subsequently said that he didn’t want “to have a war break out to drill wells”.

Later that same year, Turkey began conducting exploration of its own. In October 2018, its first deep sea drill ship — named Fatih after the Ottoman Sultan who conquered Byzantine Constantinople — set sail flanked by warships and began work in the contested waters. 

Officials insist Turkey is acting out of a need to diversify its energy supplies. Its heavy reliance on imported energy contributes to a persistent current account deficit and limits Ankara’s political room for manoeuvre with key suppliers such as Russia and Iran. But many in the industry see its actions as a spoiling tactic rather than a genuine ambition to develop resources it views as its own. 

“Turkey is in an ideal position to frustrate the further development of the Eastern Mediterranean,” says Richard Bronze, co-founder of the consultancy Energy Aspects. “But its actions are being led at least as much by politics as economics.”

The drilling ship ‘Yavuz’ scheduled to search for oil and gas off Cyprus, at the port of Dilovasi, outside Istanbul, in June last year The drilling ship ‘Yavuz’ scheduled to search for oil and gas off Cyprus, at the port of Dilovasi, outside Istanbul, in June last year © Bulent Kilic/AFP

That view is shared by Cyprus, which has responded to what it called the illegal drilling by issuing arrest warrants for the crew of one of the Turkish ships, and making a series of denunciations of Ankara’s actions. In January, after Turkey announced its second drill ship would soon begin a new mission, the Cypriot presidency accused Turkey of “turning into a pirate state”.

Cyprus has also pressed for support from the EU, which controversially decided to welcome the island as a member in 2004 despite its divided status. The 27-member bloc has repeatedly condemned Turkey’s drilling efforts as “illegal” and urged it to stop.

Turkish paratroopers land in Cyprus on July 20 1974, during Turkey’s invasion of north Cyprus Turkish paratroopers land in Cyprus on July 20 1974, during Turkey’s invasion of north Cyprus © STR/AFP

Ankara accuses Brussels of taking sides. “The EU seems to have been completely taken hostage by the maximalist positions of Greece and Greek Cypriots,” Cagatay Erciyes, director-general for maritime affairs at the Turkish foreign ministry, told the Financial Times. The EU, he said, “prefers to be a party to the problem, rather than helping to solve it”.

Turkey was left further isolated when, at the end of last year, the US Congress lifted an arms embargo on Cyprus and increased foreign aid to the island in a show of support for its gas exploration. One of the senators behind the move, Robert Menendez, said at the time that, “We made it clear that we will no longer accept Turkey’s aggression in the Eastern Mediterranean region.”

ExxonMobil, the largest American oil major, plans to do further evaluation work on a potential discovery identified in 2019 — raising the question of whether Ankara would dare to risk a maritime confrontation with a giant of US industry.

Nigar Goksel, Turkey director of the conflict prevention organisation International Crisis Group, says there was always hope of a breakthrough, whether it was Cyprus peace talks or EU-Turkey dialogue. “But now there are only sticks, no carrots,” she says. “There’s no good faith, there’s no dialogue. There’s nothing in sight.”

Libya deal

Against this backdrop, Turkey signed a landmark deal with the UN-backed Government of National Accord in Libya, drawing Ankara deeper into the conflict in the country but winning it a rare ally in its hydrocarbons battle.

Turkey had already been deepening its involvement in the Libyan civil war, sending military support to the embattled government in Tripoli that was under siege from General Khalifa Haftar, a warlord fighting to take control of the capital. 

Ankara has a series of overlapping political, geopolitical and business interests in Libya — Gen Haftar is backed by some of Turkey’s arch rivals including Egypt and the UAE. But gas is also critical. In November, the two countries signed an agreement that delineated new maritime boundaries between them.

Libyan National Army members head out of Benghazi to reinforce the troops advancing to Tripoli, in April last year Libyan National Army members head out of Benghazi to reinforce the troops advancing to Tripoli, in April last year © Esam Omran/Reuters

Nikos Dendias, Greek foreign minister, dismissed the deal as “verging on the ridiculous” for ignoring the existence of Crete. The EU said that it “infringes upon the sovereign rights of third states [and] does not comply with the law of the sea”. 

“The purpose of the deal,” admits one Turkish official, was that it “blocks any pipeline going through the Med.”

Diplomats are braced for a serious escalation of tensions if Turkey pushes ahead with plans to conduct exploratory work off the waters of Crete. One European official says: “If Turkey drills off Crete, Greece will have to react.”

Following the maritime agreement, Mr Erdogan reinforced his backing for the administration in Tripoli, sending more military equipment and advisers as well as several thousand Syrian mercenaries who fought under Turkey’s aegis in Syria. It has helped to turn the tide in the conflict, forcing Gen Haftar’s forces to retreat.

Recep Tayyip Erdogan, Turkey’s president. The country has adopted an assertive response to being excluded from regional efforts to exploit the area’s gas resources Recep Tayyip Erdogan, Turkey’s president. The country has adopted an assertive response to being excluded from regional efforts to exploit the area’s gas resources © Burhan Ozbilici/AP

But it has enraged many. The UAE added its voice in May to a joint declaration with Cyprus, Greece, Egypt and France condemning Turkey’s regional policies, accusing it of “illegal activities” in the Eastern Mediterranean and of seeking to “undermine regional stability” through its actions in Libya. Turkey responded by accusing the group of seeking to form an “alliance of evil” against it. 

While cautioning that any resolution is a long way off, some analysts and energy executives do see the potential for economics to eventually trump politics. 

“I hope that one day we will see some logic and Turkey will also become part of this development as it’s a huge market sitting right on the doorstep,” says Mathios Rigas, chief executive of London-listed Energean, which is developing projects in the region. “Energy can become a solution rather than a problem and that’s the way politicians should be looking at this.”

Turkish Defence Minister Hulusi Akar visits operations centre with Interior Minister in Libya’s Government of National Accord, Fathi Ali Bashagha, in Misrata, Libya on July 4 Turkish Defence Minister Hulusi Akar visits an operations centre with Interior Minister in Libya’s Government of National Accord, Fathi Ali Bashagha, in Misrata, Libya on July 4 © Arif Akdogan/Anadolu Agency/Getty