The discovery in late 2010
of the huge natural gas bonanza off Israel’s Mediterranean shores triggered
other neighboring countries to look more closely at their own waters.
The results revealed that the entire eastern Mediterranean is swimming
in huge untapped oil and gas reserves. That discovery is having enormous
political, geopolitical as well as economic consequences. It well may
have potential military consequences too.
Preliminary exploration has confirmed similarly impressive reserves
of gas and oil in the waters off Greece, Turkey, Cyprus and potentially,
Greek ‘energy Sirtaki’
Not surprisingly, amid its disastrous financial crisis the Greek government
began serious exploration for oil and gas. Since then the country has
been in a curious kind of a dance with the IMF and EU governments, a
kind of “energy Sirtaki” over who will control and ultimately benefit
from the huge resource discoveries there.
In December 2010, as it seemed the Greek crisis might still be resolved
without the by-now huge bailouts or privatizations, Greece’s Energy
Ministry formed a special group of experts to research the prospects
for oil and gas in Greek waters. Greece’s Energean Oil & Gas began
increased investment into drilling in the offshore waters after a successful
smaller oil discovery in 2009. Major geological surveys were made. Preliminary
estimates now are that total offshore oil in Greek waters exceeds 22
billion barrels in the Ionian Sea off western Greece and some 4 billion
barrels in the northern Aegean Sea.
The southern Aegean Sea and Cretan Sea are yet to be explored, so the
numbers could be significantly higher. An earlier Greek National Council
for Energy Policy report stated that “Greece is one of the least explored
countries in Europe regarding hydrocarbon (oil and gas-w.e.) potentials.”
According to one Greek analyst, Aristotle Vassilakis, “surveys already
done that have measured the amount of natural gas estimate it to reach
some nine trillion dollars.” Even if only a fraction of that is
available, it would transform the finances of Greece and the entire
Tulane University oil expert David Hynes told an audience in Athens
recently that Greece could potentially solve its entire public debt
crisis through development of its new-found gas and oil. He conservatively
estimates that exploitation of the reserves already discovered could
bring the country more than ¤302 billion over 25 years. The Greek government
instead has just been forced to agree to huge government layoffs, wage
cuts and pension cuts to get access to a second EU and IMF loan that
will only drive the country deeper into an economic decline.
Notably, the IMF and EU governments, among them Germany, demand instead
that Greece sell off its valuable ports and public companies, among
them of course, Greek state oil companies, to reduce state debt. Under
the best of conditions the asset selloffs would bring the country perhaps
¤50 billion. Plans call for the Greek state-owned natural gas company,
DEPA, to privatize 65% of its shares to reduce debt. Buyers would likely
come from outside the country, as few Greek companies are in a position
in the crisis to take it.
One significant problem, aside from the fact the IMF demands Greece
selloff its public oil interests, is the fact that Greece has not declared
a deeper exclusive economic zone like most other countries which drill
for oil. There was seen little need until now. An Exclusive Economic
Zone (EEZ) gives a state special mineral rights in its declared waters
under the Third United Nations Convention on the Law of the Sea (UNCLOS),
which came into force in November 1994. Under UNCLOS III, a nation can
claim an EEZ of 200 nautical miles from its coastline.
Turkey has previously stated it would consider it an act of war if Greece
drilled further into the Aegean. Until now that did not seem to
have serious economic consequences, as no oil or gas reserves were known.
Now it’s an entirely different ballgame.
Evangelos Kouloumbis, former Greek Industry Minister recently stated
that Greece could cover “50% its needs with the oil to be found in offshore
fields in the Aegean Sea, and the only obstacle to that is the Turkish
opposition for an eventual Greek exploitation.”
Hillary dances the Sirtaki too…
In July 2011 Washington joined the Greek energy Sirtaki. Secretary of
State Hillary Clinton flew to Athens with energy on her mind. That was
clear by the fact she brought with her her Special Envoy for Eurasian
Energy, Richard Morningstar. Morningstar was husband Bill Clinton’s
Special Advisor to the President on Caspian Basin Energy Diplomacy,
and one of the Washington strategic operatives in the geopolitical battles
to dismember the Soviet Union and surround a chaos-ridden Russia with
hostile pro-NATO former states of the USSR. Morningstar, along with
his controversial aide, Matthew Bryza, have been the key Washington
architects of Washington’s geopolitically-motivated oil and gas pipeline
projects that would isolate Russia and its Gazprom gas resources from
the EU. Bryza is an open opponent of Russian Gazprom’s South Stream
gas pipeline that would transit the eastern Mediterranean states. Clearly
the Obama Administration is not at all neutral about the new Greek oil
and gas discoveries. Three days after Hillary left Athens the Greek
government proposed creation of a new government agency to run tenders
for oil and gas surveys and ultimate drilling bids.
Morningstar is the US specialist in economic warfare against Russian
energy diplomacy. He was instrumental in backing the controversial B-T-C
oil pipeline from Baku through Tbilisi in Georgia across to the Turkish
Mediterranean port of Ceyhan, a costly enterprise designed solely to
bypass Russian oil pipeline transit. He has openly proposed that Greece
and Turkey drop all historic differences over Cyprus, over numerous
other historic issues and agree to jointly pool all their oil and gas
reserves in the Aegean Sea. He also has told the Greek government it
should forget cooperation with Moscow on the South Stream and Bourgas-Alexandroupolis
gas pipeline projects.
According to a report from Greek political analyst Aristotle Vassilakis
published in July 2011, Washington’s motive for pushing Greece to join
forces with Turkey on oil and gas is to force a formula to divide resulting
oil and gas revenues. According to his report, Washington proposes that
Greece get 20% of revenues, Turkey another 20% and the US-backed Noble
Energy Company of Houston Texas, the company successfully drilling in
the Israeli and Greek offshore waters, would get the lion’s share of
Secretary of State Hillary Clinton’s husband, Bill, is a
Washington lobbyist for Noble Energy.
And some Cyprus complications…
As if these geopolitical complications were not enough, Noble Energy,
has also discovered huge volumes of gas off the waters of the Republic
of Cyprus. In December 2011 Noble announced a successful well offshore
Cyprus in a field estimated to hold at least 7 trillion cubic feet of
natural gas. Noble’s CEO, Charles Davidson remarked to the press, “This
latest discovery in Cyprus further highlights the quality and significance
of this world-class basin.”
Cyprus is a complicated piece of real estate. In the 1970’s as declassified
US Government documents recently revealed, then-US Secretary of State
Henry Kissinger actively encouraged and facilitated arms to the Turkish
regime of Kissinger’s former Harvard student and then- Prime Minister
Bulent Ecevit, to stage a military invasion of Cyprus in 1974, in effect
partitioning the island between an ethnically Turkish north and an ethnically
Greek Republic of Cyprus in the south, a division which remains.
The Kissinger strategy, backed by the British was believed intended
to create a pretext for a permanent US and British military listening
post in the eastern Mediterranean during the Cold War.
Today the ethnically Greek south, where Noble has discovered large gas
deposits, is a member of the EU. Its President, Demetris Christofias,
is the only national leader in the European Union who is a communist.
He is also a close friend of Israel, and of Russia. In addition, he
is a major critic of American foreign policy, as well as of Turkey.
Now Israel is planning to build an underwater gas pipeline from the
Israeli Levantine fields across Cyprus waters onto the Greek mainland
where it would be sold on the EU market. The Cyprus and Israel governments
have mutually agreed on delimitation of their respective economic zones,
leaving Turkey in the cold. Turkey openly threatened Cyprus for signing
the agreement with Noble Energy. That led to a Russian statement that
it would not tolerate Turkish threats against Cyprus, further complicating
Turkish-Israeli relations, once quite friendly, have become increasingly
strained in recent years under the Erdogan foreign policies. Ankara
has expressed concern about Israel's recent ties with its historic antagonists,
Greece and the Greek side of Cyprus. Turkey's ally the Turkish Republic
of Northern Cyprus, fears it could miss out on its fair share of the
gas after Israel and Nicosia signed an agreement to divide the 250 kilometers
of sea that separate them.
It becomes evident, especially when we glance at a map of the eastern
Mediterranean, that the oil and gas prospective bonanza there is a rapidly
unfolding conflict zone of tectonic magnitude involving strategic US,
Russian, EU, Israeli and Turkish, Syrian and Lebanese interests.
*Author of A Century of War: Anglo-American Oil Politics and
the New World Order
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