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Gas exploitation totally dependent on a solution

US Special Envoy for Energy Affairs at the State Department Amos Hochstein

The US heads a growing list of those insisting that to exploit its hydrocarbons, Cyprus has to work with Turkey

By Demetris Papadopoulos

SPEAKING before a joint sub-committee of Congress, the US Special Envoy for Energy Affairs at the State Department Amos Hochstein said that the development of energy reserves in the eastern Mediterranean “has become a top foreign policy priority of the United States”. Describing the prospects, Hochstein spoke about an exciting opportunity for the “strengthening of welfare, economic security, stability and political security” of the region.

The American expert’s views were not a theoretical analysis, but an elaboration of the huge energy investment that is already in the pipeline. This is confirmed by the recent energy developments in the eastern Mediterranean, of which the main one is the restoration of relations between Israel and Turkey. According to Hochstein for the part of the plan relating to energy security to be implemented “there must first be an agreement in Cyprus because the pipeline to Turkey will pass through the Cyprus EEZ.” He said there were discussions with Turkey on the matter. “I think President Erdogan, as well as the prime minister and energy minister recognise the benefits provided by energy security,” he said.

Hochstein said that the energy resources already discovered as well as those discovered in the future – because the area remained under-explored – “have the potential to be an economic blessing and redefine the geo-political setting of the region”.

In other words, Cyprus is faced with a huge challenge which, if approached positively, would change the course of history. Energy plans in the eastern Mediterranean place Cyprus at the core of a project of gigantic investments that will change everything in terms of security, development and regional welfare. For this potential to be unleashed, a Cyprus solution is necessary.

“The market continues to seek confirmation that the historical political differences would not constitute obstacles to investment and development,” said Hochstein, warning that “time was crucial”.

Completing this plan is a legacy the current US government wants to leave our region. Vice-President Joe Biden is personally involved and had put in a good word for Cyprus with Exxon Mobil so it would express interest in the third licensing round. However, the Obama government only has a few months left, with presidential elections scheduled for November.

Geography, which for centuries was punitive for Cyprus, under current circumstances could turn into a blessing. If Cyprus seizes this opportunity not only would it be able to exploit its gas deposits, but as the country through which the pipelines would pass it would also take a share of the revenue of neighbouring countries.

The most idiotic political argument heard in recent years in Cyprus was the one claiming that hydrocarbons should not be linked to the Cyprus problem. The rational approach entails the exact opposite. But we must come to terms with the reality that without an understanding with Turkey we will not be able to fully exploit our hydrocarbons. The reasons are blatantly obvious.

First, investment of such a scale requires political stability. Second, Turkey is a huge market with huge energy needs. Third, it is only through Turkey that Cyprus can reach other markets in an economically viable way.

In addition, Turkey is one of the pillars of the West’s political and energy security. “The eastern Mediterranean could play a role in the freeing of central and south-east Europe from its overwhelming dependence on Russian natural gas,” Hochstein told the Congress sub-committee. The West, for its own geo-political reasons, does not want Turkey to be primarily reliant on Russian gas. “Being supplied with its energy by Russia and Iran, Turkey is vulnerable and as a result we see her effort to vary her suppliers,” Hochstein said.

Such large-scale projects are way beyond Cyprus’ capabilities. There is no more powerful, trustworthy international player to co-operate with than the West, and Turkey is an integral part of its energy plans. Talk about an alliance with Russia and an axis with Israel against Turkey have been exposed as illusions, as plausible as the prophecies of Father Paisios.

There is an understandable sense of insecurity in Cyprus expressed in the question, “are we going to entrust our gas to Turkey?” And the answer given is “absolutely not”. This is an emotional and sterile reaction that pushes us into inaction and the wrestling with words and punctuation marks in the defence of our national security.

The security of states is not secured through insurance contracts as you would your new car. States take initiatives and create conditions that safeguard security and welfare. The best example is Europe. After centuries of bloodshed and human suffering, just over five years after the conclusion of the worst war in human history, the European Coal and Steel Community was created and developed into today’s European Union. No agreements and no guarantees were as solid and effective as the forging of common financial interests between European states. Consequently, only if we build common interests with Turkey – from which we are separated by a lot less than separated the countries of Europe before the common market was set up – will we free ourselves from our phobias and insecurities.

There is no doubt that President Anastasiades sees the bigger picture. As he revealed, not so long ago, he has no qualms about having contacts with representatives of Turkish energy companies to promote the idea that common interests would arise after a Cyprus solution. The success of Cyprus’ third licensing round – with Exxon Mobil expressing interest, the rekindling of Total’s interest, the reconfirmation of ENI’s interest and the participation of Qatar Petroleum, despite Qatar’s very close ties and military alliance with Turkey – was certainly no accident. Nor should we have ignored Turkey’s very mild, almost non-existent, reaction to the third licensing round.

All these developments are within the framework of the West’s energy security and only within this will investments take place. Anyone claiming that Cyprus could exploit its hydrocarbon reserves without Turkey is not living in the real world. In short, the dynamic of energy developments in the region depends on the Cyprus problem. The next weeks or months will provide a much clearer picture.

This unique opportunity should not be lost over the return of one less village in the negotiations on territory or over a national psychosis regarding the issue of guarantees. And this does not only relate to the Greek Cypriots, but also to the Turkish Cypriots and to Turkey, which, as the biggest state proportionally stands to reap the greatest benefit from the energy boom of the eastern Mediterranean that would be triggered by a Cyprus settlement.

Demetris Papadopoulos is a researcher

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