Cyprus presidential elections crucial for regional oil, gas development - opinion

CYPRUS PRESIDENTIAL candidate Nikos Christodoulides waves to supporters during a pre-election rally in Nicosia, on Sunday.

A record-high 14 candidates are in the race for Cyprus’ presidential elections that will be held on Sunday to replace Nicos Anastasiades, a moderate in the office since 2013.

Historically, nations to Europe’s East and South (and the Middle East) supplied the necessary energy to the West. Over the last two decades, the European dependence on imported natural gas went up by almost 20%, from 65.7% to 83.6%. Before the war in Ukraine started, Germany imported 60% of its gas from Russia.

With Russian lobbyists pressuring Europe to cast aside alternatives to Russian gas, such as nuclear energy, we saw a lopsided growth in Russia’s strategic power over Europe. However, it clearly backfired as Putin’s war on Ukraine has continued despite sanctions. Russia lost a huge market in Europe: as much as 150 billion cubic meters of gas sold annually.

Today, Turkey thinks it might be time for a decades-long dream to come true, becoming an energy hub for Europe, as this author wrote about it as early as 2010.

All avenues Turkey may take to become an energy hub present challenges. The Eastern Mediterranean is known to have natural gas reserves that could supply a substantial share of the market Russia left behind. Consequently, such a development is of great importance to Israel.

Other nations further east, namely Turkmenistan and Azerbaijan, are also looking at delivering more of their energy resources to Western markets. Stronger ties to Europe for energy-rich Middle Eastern suppliers, such as Qatar, could be an alternative to Europe’s past Russian supply, as well. While Turkey has the ambition to manage all these resources under one geopolitical roof, its greatest challenge is strategic instability in the Eastern Mediterranean neighborhood.

A VIEW OF the Israeli Leviathan gas field gas processing rig near Caesarea. (credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

Egypt and Israel are the two leading natural gas producers in the Eastern Mediterranean and Cyprus has discovered reserves, which are under development. American companies Chevron and Exxon, Royal Dutch Shell, French Total, Korean Kogas, Israeli Delek and many others have signed agreements with Cyprus for offshore gas development, including the promising Aphrodite field.

Tensions with Turkey impact Cypriot gas field prospects. Lebanon just concluded a maritime demarcation agreement with Israel, with Hezbollah and Iran watching nervously from the sidelines.

Cyprus presidential elections: Who will win and what will it mean for the region?

Turkey’s geopolitical advantage might be jeopardized by its over-ambitious foreign policy making neighbors nervous. A record-high 14 candidates are in the race for Cyprus’ presidential elections that will be held on Sunday to replace Nicos Anastasiades, a moderate in the office since 2013, while relations between Ankara and Nicosia remain fraught.

Polls show former foreign minister Nikos Christodoulides, who is endorsed by the three small parties, as still in the lead, though his lead is shrinking. Two of these parties, Diko and Edec, oppose a federal solution to Cypriot reunification.

While Christodoulides claims to tackle the issue of division on the island, the main source of tension between Greek and Turkish authorities after Turkish military intervention in 1974, his opponents question his integrity, criticize his hard line with Turkey, and blame him for supporting a two-state solution in Cyprus. Ironically, they say, he is doing Erdogan’s bid, facilitating the island’s division.

Turkey-Cyprus tensions and EU concern over Erdogan

THE TURKISH Foreign Ministry blames Cyprus for increasing tensions by unilaterally carrying out exploration activities and violating the rights of Turkish Cypriots.

The Turkish Republic of Northern Cyprus (TRNC), a self-proclaimed country in the northern third of the island only recognized by Turkey, rejected the potentially lucrative division of the gas sales proceeds offered by Cyprus. During maneuvers aimed at derailing natural gas exploration in Cypriot waters, Turkish warships intimidated and chased away ships working on behalf of Italy’s Eni and France’s TotalEnergies, while Ankara is asking for exploration licensing itself.

The EU is getting nervous about Erdogan’s long stay in power and potential dependence on the growing Turkish gas hub. Yet, Washington and London are supportive of Ankara’s growing engagement in the Caucasus, Central Asia and even in Ukraine. EU and NATO are wary of Erdogan’s neo-Ottoman empire that may include Northern Cyprus in case the reunification talks will fail due to a too intransigent position of a future Cypriot president.

Erdogan, nicknamed the “rais,” has a history with Europe, while Christodoulides’ reported tough positions make him a problematic choice for Brussels. Turkey’s Exclusive Economic Zone (EEZ) claims may challenge the future Christodoulides administration, as the maritime demarcation agreement between Turkey and Libya challenged his predecessor’s.

Beyond a geopolitically rocky Eastern Mediterranean Turkey is also looking East. The Southern Gas Corridor is already operational, Trans-Anatolian Pipeline (TANAP) connects the South Caucasus Pipeline to the Trans Adriatic Pipeline, carrying natural gas to Europe. TANAP is the largest segment of the corridor and projections estimate the current 16 billion cubic meters (bcm) capacity can be expanded to 30 bcm a year by 2030.

Erdogan’s foreign policy boasts close ties with Azerbaijan and Turkmenistan. Yet Erdogan’s administration is known to play both sides, and convincing Europe to finance a multi-billion dollar TANAP expansion project will take more than his success in negotiating a middle road with Vladimir Putin.

Thus, presidential elections in Cyprus and the relationship with the Netanyahu administration in Jerusalem will directly impact the outlook of Turkey’s energy hub project. While Turkey seems to be striving to gain allies in the Mediterranean, it is a tall order considering it’s neo-Ottoman agenda to become a regional power and a leader in the Sunni Islamic world.

A crucial presidential election that Erdogan is moving from June to May is on the horizon for Turkey, as well. Whether it is Erdogan or not, whoever would rule in the presidential palace in Ankara must aim to restore relationships with neighbors before Turkey can clear the remaining hurdles to become the massive energy hub for Europe. Cyprus needs a president who can protect its interests but also play ball to enhance Europe’s energy security.

The writer, a Ph.D., is the director of the Energy, Growth and Security Program at the International Tax and Investment Center and a non-resident senior fellow at the Atlantic Council. He is the founder of International Market Analysis Inc.

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