Wednesday, December 07, 2011

Conflict Resolution in EastMed

Dear Colleagues
For Turkey, there is no South Cyprus state. Turkey does not recognize South Cyprus, hence there is no EEZ which belongs to South Cyprus. Moreover there is nothing to negotiate since Turkey has no counter party to negotiate.
South Cyprus is a hopeless country with no ability to negotiate, they are historically non-negotiable negotiators, sort of another spoilt child of EU and international community. Anyhow Turkey does not care. 
South Cyprus is an unreliable counter party with desperate bankrupt economy, with a huge burden on European Union. US and EU should not ignore the situation and hence they should not bury their heads into sand. 
South Cyprus lost half of her electricity generating capacity in July 2011 in Vassilikos disaster due to neglect and public ignorance.
Noble Energy(NYSE:NBL)  had finalized the first offshore drilling and the outcome is NOT what they have expected. That is why NBL recently transferred some of their shares to an Israeli company, it is a sort of transferring political risk.
NBL is a medium size, pure commercial company, which tries to maximize her profit. They carry too much political and technical risk  in this venture.
NBL had created EIA report for the venture with no political risk  foreseen/ estimated. Please do note that commercial environment can not carry that much unforeseen political risk.
NBL has already spent 200+m USDollar for the first offshore drilling gamble and the outcome is not so good, as opposite expected earlier. 
Who will be paying the expenses for a new offshore drilling investment? Who will be persuaded?
NBL has already reached to her upper limit of risk taking capability, and appeared to be exhausted in this political game.
All announcements of South Cyprus media sources are to be considered as "wishful thinking", since there is no proven investigation yet. They are all in predicted nature.
Please do note that there is no risk of hot clash, or any war for sure. It is only a dispute settlement between two sides namely North and South for fair share of nearby natural resources.  
Turkish deliberate aggression is normal and unavoidable, it is the natural course of the international relations, it is a fair game in dispute resolution.
Israel, Greece and Turkey have no luxury of being enemies. They need each other in EastMed. The existing conflict between Israel and Turkey is unnecessary/ an artificial event created by the ruling Israeli government. It will be solved with apology when the existing Israeli government is replaced with the opposition, if the Israeli public wishes so in the next general elections
Mutual respect to fair share of nearby natural resources is the key for conflict resolution in EastMed.
Mainland Turkey is pushing Northern Cyprus to have better economy, with new austerity measures, not to spend more than they can generate.
Please do note that Turkey is a regional power in EastMed with 75m population, vibrant / growing economy, there is no solution without prior consent of Turkey for sure.
Your comments are always welcome. Best regards

Haluk Direskeneli, Ankara based Energy Analyst,  


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