Energy Cyprus Peace Hope Hinge

Cypriot President Nicos Anastasiades said the best chance to end decades of division with occupying Turks on the island is oil and gas.

NICOSIA – Four decades of division Cyprus, separating Cypriots from Turks who still unlawfully occupy the northern third of the island, could be ended because of possible energy reserves off the coast, but Cypriot President Nicos Anastasiades said he’ll walk away from new negotiations if Turkish vessels violate Nicosia’s exclusive economic zone.

International companies are searching for oil and gas but Turkey, which said it wants a share even if they are found off lands it doesn’t occupy, has already sent at least one warship into the area as an apparent warning. “We have made it clear that if violations continue, our response will be to leave the talks,” he said.

The resumption of reunification talks was triggered by the agreement of a joint communique with Turkish-Cypriot leader Dervis Eroglu earlier this month.

Anastasiades identified the transfer of national gas from Israel and the discovery of hydrocarbons off Cyprus as the key factor driving a new round of peace talks on the island.

“Hydrocarbons are a decisive factor,” he said. “Turkey has needs, Israel has needs and Cyprus has needs. By solving the Cyprus issue we open up wide horizons,” he told the newspaper Kathimerini in an interview.

He said that energy got the United States, which looked the other way during the 1974 invasion, to suddenly take new interest in reunification especially because American companies want to explore for oil and gas off Cyprus.

“The USA’s interest after the discovery of hydrocarbons in the southeastern Mediterranean creates a new dynamic, especially if the quantities are such that they replace existing monopolies and the political dependencies they create,” said Anastasiades.

Anastasiades spoke to Kathimerini before the executive committee of junior coalition partner DIKO voted for the party to leave the government. The results of the vote were made known after DIKO leader Nicolas Papadopoulos accused Anastasiades of already making major concessions to the Turkish-Cypriots.

“There are so many important concessions, that the Turkish side has achieved most of its aspirations even before negotiations have actually started,” DIKO’s executive committee said in a statement. The party has four ministers in the 11-member cabinet, including the Energy and Defense portfolios.

In an earlier interview with The Associated Press, Anastasiades said a deal would allow Turkey to be supplied with newly-found Cypriot and Israeli natural gas and contribute to improving relations between Ankara and Tel Aviv.

Anastasiades said that the United States was instrumental in the resumption of stalled peace talks with breakaway Turkish Cypriots and that the growing interest in an accord is grounded in the potential for regional energy cooperation and helping to dampen down instability in a turbulent area.

He says Israel could also export its offshore gas to Turkey through a reunified Cyprus and that Israeli Prime Minister Benjamin Netanyahu may visit Cyprus in the spring. That would be a landmark visit as it would be only the second time since the creation of Israel in 1948 that an Israeli premier has visited Cyprus.

The White House says President Barack Obama and Turkish Prime Minister Recep Tayyip Erdogan discussed the elusive pursuit of reunification on Cyprus, especially with Turkey seeking to enter the European Union. Erdogan though had said, “There is no country called Cyprus,” and Turkey won’t admit Cypriot ships and planes even though Cyprus is a member of the bloc.

Despite that, Obama thanked Erdogan for working to restart peace talks in Cyprus even though Anastasiades accused the Turks of blocking the effort.

An agreement to end the 40-year division of Cyprus could give Turkey access to ample supplies of gas and reboot its relations with Israel, Anastasiades said. He added that the reunification of ethnically-divided Cyprus could act as a linchpin to regional energy cooperation that could heal the strained relations between Ankara and Tel Aviv.

The two former allies fell out dramatically after Israeli commandos stormed a pro-Palestinian ship trying to breach a blockade of the Gaza Strip in May 2010. The raid killed eight Turks and one Turkish-American.

“A Cyprus settlement, reached as quickly as possible, will assist not only in Israeli (gas export) planning, but also contribute greatly to restoring relations with Turkey,” Anastasiades said.

Numerous talks over the decades have failed to resolve one of the world’s most intractable problems. Earlier this month, after a hiatus of 20 months and following pressure from the United States, the two sides agreed to talk again.

Anastasiades said a deal would help Turkey plug its energy needs by allowing the country access to a steady supply of Cypriot and Israeli natural gas. Cyprus and Israel have both found potentially big gas deposits over the past few years, which they are looking to develop in partnership.

Cyprus is also planning to build a liquefied natural gas processing plant which Israel would use to export its gas — a much cheaper alternative to building a pipeline direct to Turkey.

Anastasiades said a deal would eliminate a key political impediment against exporting to Turkey. Ankara currently doesn’t recognize the island’s sovereignty and disputes its rights to the offshore gas deposits.

“This would be very significant for Turkey and at the same time significant for Israel and it could be another way Cyprus contributes to peace in the region,” he said.

Potential gas riches would be an economic boon for Cyprus which last year agreed to a financial rescue from international lenders after its banking sector was ruined by bad loans and big holdings in devalued Greek bonds.