Cyprus Mail
Cyprus Cyprus Talks Energy

Gas and conflict don’t mix

UN Special Adviser Espen Barth Eide (Christos Theodorides)

By Jean Christou

CYPRUS’ HYDROCARBONS future could end up being less lucrative without a political settlement, UN Special Adviser Espen Barth Eide warned in an interview with the Sunday Mail.

After a week of contacts on the island, the Norwegian diplomat, who comes from a country known for its well-managed oil wealth, said he had looked deeply into the reality of the island’s gas prospects with and without a Cyprus settlement.

“There are not enormous quantities. It is significant but it is quite expensive to get hold of because it’s very deep so it requires expensive technology and you have to build many places because it’s compartmentalised, which means production and exploration costs are high,” he said.
“It will be a relatively expensive gas to produce.”

Eide said there was already a lot of natural gas on the global market and current prices were quite low since the advent of fracking “which means the margin isn’t very high”. An international company looking at Cyprus would see political conflict and expensive gas ‘and not very much gas’ either. “I am not convinced they would say ‘let’s go for Cyprus’,” he said.

Statistically, any country that discovers hydrocarbons that can go either of two ways – the road to mismanagement and/or political conflict, or they can do it right, he said. Successful oil-rich countries were successful because they established clear rules and regulations and avoided political conflict, he said.

“And Cyprus is now exactly at the point where you have to choose between these two destinies. There is no middle ground. It will either take you into much more trouble and a little bit of income, or it will take you to a balanced politically viable solution or any other agreed solution, and more wealth,” he said.

“I would think about how smart it is to perpetuate the conflict just as you’re moving into an oil and gas economy… it sounds harsh but I’m saying this thing will either get better soon or significantly worse because that’s what history tells us.”

Eide has found his initial efforts to facilitate a Cyprus solution stymied by the Greek Cypriot side’s withdrawal from the negotiations in October in response to incursions by the Turkish seismic vessel Barbaros into Cyprus’ exclusive economic zone. President Nicos Anastasiades has said he would not even discuss going back to the table while the Barbaros remains, while Turkey and the Turkish Cypriot side want hydrocarbons on the table before halting their explorations.

Both sides rejected Eide’s proposal, which he said he thought was quite good but was misunderstood.

It involved creating a panel of talking heads to discuss the future of hydrocarbons ahead of a settlement but did not involve negotiations or co-decisions.

“It was taking the starting point that the Greek Cypriots do not want in any way to negotiate hydrocarbons before a solution, so my proposal was totally consistent with that,” he said.

The panel’s ideas would not be part of a settlement but an inspiration for the post-settlement management of resources “because this has to happen anyway”, and both sides were well aware of it.

“My sense is that it was probably too much for the Greek Cypriot side. I was not suggesting they stop now. That was explicit,” he said. The Turkish Cypriots didn’t like it because they wanted something “much more”, to be part of the current decision-making.

“So I don’t really understand… in the sense since the proposal was closer to the Greek Cypriot side than the Turkish Cypriot side, I was kind of less surprised by the rejection in the north than here,” he said.

“But what I told both leaders now, and I also warned them… for a time I am not coming up with another plan. Now it’s up to them. They know how to propose to me what do to.”

Many Greek Cypriots feel it is unfair that the breakaway state in the north should now claim a share of the wealth clearly located off the southern coast, and believe that if the situation were reversed the Turkish Cypriots would not even consider sharing.

Eide was diplomatic, saying a lot of bad things had happened in Cyprus in the past. Grave mistakes were made on both sides “not necessarily in equal proportion” which had created a lot of unnecessary suffering, he said, but dwelling on it would not take Cyprus forward.

Of all the differences involved in the Cyprus issue, hydrocarbons has not been one of them, and everything to do with the topic rested with the future federal state as already agreed by the sides.

“Normally I would say that if you agree on the future but not on the present, then let’s move forward, because then we get to the future. But that’s clearly not what’s happening here,” he said.

But he believes the two sides will find their way back to the table within a reasonable period though he could not say when, other than “this winter”. The leaders wanted to meet but did not know how because a circumstance had been created which needed to be changed.

Eide said the arguments both sides use were exactly the same “with an alternative cast”.
“My answer to both sides is if you really want to know if the other side is ready to play the game and deliver something, you have to see that at the table,” said Eide. “You will not find out by shouting with a megaphone over the Green Line.”

The only way back now was if both sides were willing to do something “where of course the presence of the Barbaros is one of the things”.

If that happens, Eide said it could easily be a matter of months rather than years to reach a solution. There were no advantages to postponing. His approach would be systematic, starting with the “soft differences” and working their way to the hard-core ones, which could only be in the form of trade-offs.

“The process of getting there will hopefully create trust because you see that you’re ticking off things,” he said.

As to whether or not he would be willing to ‘bang heads’ – to use a phrase from a couple of his predecessors – Eide said he could be both mild and tough when necessary.

In the meantime, with little negotiating to do, he has spent his week encouraging ordinary Cypriots not to leave everything to the political class.

“In a sense the non-solution of the Cyprus problem is such an integral part of political life that it’s almost defining leaders,” he said. Political figures on both sides might not be able to untangle themselves from their long-held positions without input from broader Cypriot society. Ordinary Cypriots needed to ask themselves what they wanted – to live with each other or divorce – “which I would clearly not want but of course it’s possible”.

Having said that, Eide was clear his mandate was to help find a unified solution and the phrase that dare not speak its name ‘a two-state solution’ was not part of that. He was not here to find just “any solution”, though if any country decided peacefully to part, the international community would likely not prevent it, he said.

Eide believes he could very well be the last negotiator for Cyprus one way or the other but is in it for the duration.

“I have not given myself a time limit. I am personally not in a hurry,” he said. “I dare to say and it’s a very dangerous statement which I know will be used against me if I am wrong, but I am saying humbly and hoping not to be misunderstood, but I think I will be the last negotiator.”

He hopes that meant a solution but the alternative was that the UN and Cypriots themselves would give up.

“Sometimes certain things get better by waiting but while a lot of people seem to think you’re in the middle of a big drama… I’ve seen bigger dramas. No one is dying which… means things can be repaired.” It was all very civilised compared to other conflicts in that the two sides in Cyprus may disagree “but they agree to disagree”.

As a challenge for a seasoned diplomat on a scale of one to ten, Eide didn’t even blink before saying Cyprus was a 6.5. “I would give it a three on complexity but maybe an eight on the factor which is… the comfort in the non-solution.”

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