Cyprus Mail
Cyprus Energy

‘More talk, little action’ from Israel visit (Update 3)

The joint statement released on Sunday by the leaders of Cyprus and Israel on energy cooperation was crafted in such as a way as to be deliberately generic, satisfying both sides on a PR level, an energy analyst tells the Cyprus Mail.

The joint statement, issued after the meeting in Jerusalem between President Nicos Anastasiades and Israeli PM Benjamin Netanyahu, read:

“In the context of the exploration and development of energy resources in the Eastern Mediterranean, both leaders concluded that there is no question that resolving the outstanding issues between Cyprus and Turkey would greatly facilitate the pace of the development of future projects, which will proceed according to international law, as well as greatly enhance stability in the region. Therefore, Israel has a strong interest in the resolution of this issue.”

But as analyst Charles Ellinas observes, although the mention of “international law” may on the surface seem positive, it can be read in different ways, depending on what each side means by it.

Cyprus has repeatedly stated it is opposed to an Israel-Turkey pipeline running through its Exclusive Economic Zone (EEZ) until a comprehensive settlement of the Cyprus problem.

But whereas Cyprus’ ally Israel would prefer to have Nicosia’s consent for the pipeline, it does not need it.

Cyprus and Turkey are members of the Energy Charter Treaty, an international agreement which establishes a multilateral framework for cross-border cooperation in the energy industry.

Under the treaty, EEZs are not considered sovereign territory, therefore the owner of an EEZ cannot stop a project from going ahead. Cyprus might for instance raise environmental objections to the pipeline, but Israel and Turkey could easily circumnavigate that objection by coming up with an alternative pipeline route.

Therefore, Ellinas suggests, where the Israelis are concerned, the joint statement’s reference to “international law” may very well point to the Energy Charter – that is, that international law is in fact supportive of an Israel-Turkey pipeline.

Moreover, the expert does not see any concrete developments coming out of the meeting in Jerusalem.

The joint statement, for example, noted that the two sides discussed the issue of a unitisation agreement regarding the Aphrodite and Yishai gas fields, and concluded that by September 2016 the two energy ministers will seek to finalise these discussions.

“The operative phrase here is ‘will seek to finalise’ as opposed to ‘will finalise’,” observes Ellinas.

The Aphrodite gas field discovered in Cyprus’ Block 12 is believed to extend in part into Israeli waters – the Yishai licence. That means Israel would need to be included in the development of the reservoir.

Earlier this month, Israeli business website Globes suggested that the two nations may strike up a “barter deal,” where the Israelis would “release” the Aphrodite reservoir in return for the authorisation for a pipeline to Turkey. In such a deal, Cyprus could also connect to the pipeline and export gas to both Turkey and Europe.

At any rate, developments on the mooted pipeline, running from Israel’s massive Leviathan gas field to the Turkish shoreline, should likely not be expected this year, Ellinas says.

That is because Turkey and Israel have yet to fully re-establish diplomatic ties, following the recent rapprochement deal between the two nations.

In addition, the state of emergency in Turkey declared after the failed coup there is expected to stay in effect until October.

Meantime, Noble Energy, the operators of the Leviathan concession, have not produced a Front-End Engineering Design for the project – although they are about to.

Thus any progress on the Israel-Turkey pipeline should be anticipated sometime next year, Ellinas believes.

And Nicosia, too, must be aware of this.

“So why make a fuss now about the pipeline,” the expert says, alluding to the Israelis.

Back in Nicosia on Monday, opposition DIKO welcomed the apparent strengthening in relations with Israel.

But the party reiterated its call for an immediate convening of the National Council to discuss these matters.

“The latest events in Turkey are proof that the occupation country continues to be in an unstable political situation, which does not make it a reliable potential partner in the energy sector,” a statement read.

Ruling DISY meanwhile praised President Anastasiades’ proactive foreign policy and the tightening of relations with Israel.

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