Turkey: Energy Picture in E. Med. Becomes Both Clearer and More Complicated

As reported in this previous post, Greek Cyprus's efforts to explore for gas off the divided island's shores has led to a serious ramping up of tension in the Eastern Mediterranean, with Turkey retaliating by signing exploration deals of its own with the Turkish Cypriots and even hinting at the possibility of military action regarding the issue.
While the rhetoric has been lowered in recent weeks, new developments could bring the resource-related tension in the region back up to the surface. From an Associated Press report published yesterday:

A top official with United States firm Noble Energy said on Tuesday that a field it is conducting undersea exploratory drilling in off the coast of Cyprus may yield between 3 to 9 trillion cubic feet of natural gas.

Noble Senior Vice President Susan Cunningham says there is a 60 percent chance it will successfully reach the deposit.

Cunningham told an analyst conference at Noble’s Houston headquarters — broadcast live through the company’s Website — that firm results from the ‘Cyprus A prospect’ would impact other possible exploratory drilling in the area.

It is the first time Noble has given an estimate on the size of the deposit which lies inside the Mediterranean island’s exclusive economic zone about 115 miles (185 kilometers) off its south coast.

By comparison, Noble said an Israeli field discovered nearby in 2010 had an estimated 16 trillion cubic feet of gas — the world’s largest offshore gas discovery that year.

Cyprus officials have said they would formally announce drilling results early next month, while Commerce Minister Praxoulla Antoniadou said the government will invite tenders for more exploratory drilling inside Cyprus’s 17,000 square-mile (51,000 square-kilometer) EEZ before the end of the year.

The island’s President Dimitris Christofias said Monday that the government envisions turning the island into an energy hub.

As mentioned in another previous post, the gas row between Cyprus and Turkey also touches on Israel, whose relations with Ankara are also currently strained. As the AP reports, "Israeli energy company Delek, which is part of a Noble Energy-led consortium exploiting Israel’s offshore natural gas finds, has proposed a partnership with Cyprus to build a facility on the island to process and export gas." This means any successful gas find by Cyprus and the deepening of Israeli-Cypriot energy ties could further exacerbate the ongoing tensions between Turkey and Israel. Indeed, Cyprus appears to figure prominently in Israel's plans to develop its own budding gas fields. From an article from Israel's Globes website, about Israeli President Shimon Peres's early November visit to Cyprus:

Ten days ago, President Shimon Peres made a visit to the island designed to promote strategic cooperation between Israel and Cyprus in developing gas fields. As "Globes" has reported, the gas discoveries have warmed up the often chilly relations that have prevailed over the years. On the agenda is cooperation in developing gas fields. Estimates are that the strata of gas at Block 12 runs into neighboring Israeli licenses owned by Beni Steinmetz (42.5%), Teddy Sagi (42.5%) and Roni Helman and Uri Aldoby's Israel Opportunity (10%).
During Peres's meetings with senior Cypriot figures, he repeatedly asked that Israeli companies be given equal and fair opportunities in their operations in the country. Peres did not specify any companies by name but it was clear that he was referring to Delek Group, which has invested enormous efforts to receive 30% of the rights to Block 12. Noble Energy received 30% of the rights in 2008 to Block 12 from the Cypriot government but Delek Drilling and Avner, which each have 15% options on the license are still waiting for approval from the Cypriot government. Sources inform "Globes" that several days ago the professional echelon at Cyprus's Ministry of Energy recommended approving Delek's option. But the story does not end there. Many of the world's large oil companies are looking greedily at Block 12 and are not afraid of putting on political pressure to promote their interests.

Meanwhile, to further complicate the picture, Ankara has just announced that it will sign a deal with Shell to being exploring for resources in its own patch of the E. Mediterranean. From the Financial Times:

Turkey said it hopes to conclude an exploration deal with Royal Dutch Shell in the coming days, a move that would intensify the scramble for energy resources in the eastern Mediterranean.
“Next week we will sign [deals] for exploring oil and natural gas both on the ground and under the sea with Shell,” said Taner Yildiz, Ankara’s energy minister, in response to reports that an agreement had been reached to drill in the Mediterranean off the coastal city of Antalya.

Shell declined to confirm that agreement had been reached. “We review our growth portfolio on a regular basis,” said the company. “We are continuously looking at opportunities worldwide.”
But a Turkish energy official told the FT the deal had been reached with TPAO, the country’s state-owned oil and gas company. “We plan to have the signing ceremony next week in Ankara,” the official said. “First they will do the seismic search and, according to the results, will start exploration”.

Full story here.