Offshore Deep sea oil drilling on EastMed

Dear Colleagues,

Under South Cyprus license, Noble Energy (NYSE:NBL) of Houston Texas started offshore oil exploration on 19^th September 2011,

It is for sure that Noble energy will be at non-stop risk of nearby Marine war exercises by Turkish Navy all year long, due to unfair share of natural resources between South & North Cyprus

Noble Energy and South Cyprus will be at non-stop risk of abuse and dogfight threat by Turkish Navy and Air Force, in the disputed waters

Company is playing too risky, business environment cannot stand that much sovereign risk

Company has estimated that around 280 billion cubic meters of natural gas lie in wait below the seabed in Aphrodite field.

Noble Energy, Stock Analysis shows Bearish Engulfing Candlestick Pattern – as usual after offshore initiation in the markets. But that is misleading.

Company is pushing all risk limits, bankruptcy could appear in future due to high unforeseen risks, that is an important warning for the shareholders.

Company has started to blame rig for repeated breakdowns and is seeking an alternative deep water offshore drilling platform.

On East Mediterranean, contrary to Aegean sea, dogfight is very easy for Turkish Air Force, but very difficult for Greeks, moreover there is almost no military capability of Cyprus.

This does not mean hot clash, not military confrontation, this could only be simple military abuse, and that is sufficient to stop offshore works.

All in all, any deep-sea offshore oil exploration at Eastern Mediterranean is impossible without prior consent / or approval of Turkish government.

Therefore understanding of respective interests and joint agreement on sharing rights are  necessary between all interested  parties,

All figures/ estimations are predicted in nature, they are all fiction/ unreliable as of today, until verified as proven after expensive deep-sea offshore drilling. 

These offshore explorations are expensive, so operator company may go bankrupt until finding a profitable well.

Please do note that El Paso of USA  had 3 offshore drilling in Iskenderun Bay of East Med and found nothing in near past. Therefore commercial risks are very high. All-risk insurance is very costly.

East Med offshore drilling is not easy, work needs time, effort, money & tranquil waters away from any dispute for fair share of reserves

EEZ of South Cyprus in East Med is Exclusive Military Zone (EMZ) for Turkish Navy & Air Force,

Therefore if Turkish Parliament/ Government does not approve/ certify any legal document, then it is not in international law, such as so-called EEZ in East Med

East Med oil/gas explorations need long-term commitment, work will consume too much resources/ time/ money/ effort for exploration

East Med gas/oil offshore potential is exaggeration of media sources, take your time to get responses from the first drilling, you should be too patient to get results.

Military clash/ conflict is unlikely in East Med, but military abuse is normal, dogfight of War Planes is normal & nobody matches Turkish Navy and Air Force due to close logistics.

Nato members cannot clash, the worst thing could be to freeze all work, which means money lost for the Company in East Med investment.

A commercial company should make risk assessment carefully, it is not so easy to work for offshore drilling in disputed waters of East Med.

South Cyprus politicians look for fast good news for future after Vassilikos disaster, they promote East Med offshore with no concrete/ proven assessment.

Disputed waters of East Med is difficult risk for offshore platform operators, offshore drilling operation requires tranquil environment, it is very hard job for Noble Energy.

El Paso of USA had 3 offshore drilling in shallow waters of Iskenderun Bay in East Med in the past with high expectations, nothing found US$30m lost, now the budget is expected US$200m per deep water platform

East Med is under geographical domination of Turkish Navy. Other neighboring countries are too far to Cyprus. Even Meis island is isolated/ far/ all open for scrutiny.

East Med Offshore gas/oil reserves over optimistic, it is too deep, more than 1500 meters deep sea, plus 2600 meters rock/soil to be drilled.

It is like “Boatmen's quarrel” of Ottoman period in Istanbul where you have no physical contact, but you can only shout to beat your rivals in order to get customers, that is similar to East Med today.

It is unlikely hot clash between Turkey and Israeli or Greek/ Cypriot naval ships in East Med, because democracies do not fight, Nato members never fight with each other.

War of words of politicians is not effective in case of strong presence of Turkish Navy & Air Force in East Med offshore fields, Key is mutual work for fair share.

East Med needs common sense of neighboring countries to tap the resources in fair share, otherwise it is dispute to waste energy.

Your writer may be wrong about the unlikelihood of democracies fighting. The world's total instability right now could prompt huge miscalculations

Your comments are always welcome. With deepest respect

Haluk Direskeneli, Prinkipo based Energy Analyst