New pipeline offers could enforce Turkish diplomacy
Turkish Energy Minister Taner Yıldız has a point in putting “political feasibility” before “economic feasibility,” when it comes to oil and gas pipeline offers from new regional actors to transport their hydrocarbons to the European market.
Despite the ongoing eurozone crisis, Europe is a major consumer of oil and gas. The major gas supplier of Europe is Russia. Actually Russia, Saudi Arabia and Iran are old players of the oil and gas politics, together with the international energy giants like BP, Shell, Exxon, Chevron, Gazprom and Total.
Azerbaijan has been the pioneer of the new players since the disintegration of the Soviet Union in 1992, when it started to export its oil via a pipeline from the Turkish Mediterranean port of Ceyhan due to the Baku-Tbilisi-Ceyhan pipeline agreement in 1999. This was the first export outside of Russian, Saudi or Iranian control.
Now there are more new players. Following the downfall of Saddam Hussein in Iraq brought about by Americans in 2003, the Kurdistan Regional Government (KRG) in the North - bordering Turkey and Iran -has started to voice demands to be able to export its own oil and gas, especially via pipelines through Turkey and thus securing the advantage of NATO protection there. The fields there were not tapped by Saddam Hussein, mainly in order to avoid giving a share to Kurds for decades, but they are huge, enough to make Iraq the number one producer in the world by 2030, if Iraq manages to maintain its political unity.
We have two more in the last two years with new fields discovered in the eastern Mediterranean off of Israel and the island of Cyprus. The Israeli government and both the Greek and Turkish governments of the divided Cyprus know that the most economically feasible way to export their gas to Europe is via pipelines through Turkey, as Azerbaijan has already started a major project (TANAP) to do so. As the rediscovery of shale gas made liquefied gas (LNG) too expensive to compete, pipelines seem to be the future of the gas trade.
The Azeri project has no “political feasibility” issues with Turkey, but that could not be said for the other two.
Among three, the Israeli offer to export its gas via Turkey seems to be closer to achieving “political feasibility,” since the U.S. mediation to bring the two countries back on track is in process. If Turkish Prime Minister Recep Tayyip Erdoğan’s Palestine visit, expected to take place in June, goes smoothly for Ankara, the talks for the pipeline project could start.
Iraqi gas and oil could flow more via Turkey (in addition to the existing twin pipeline) the when central government in Baghdad and the federal Kurdish one in Arbil come to terms for sharing their revenues; that would definitely help Turkey in finding a political solution to its own Kurdish problem.
The most problematic one is the Cypriot gas. Turkey does not recognize the Greek government of the Republic of Cyprus as representing the Turkish part in the north. Ankara has already blacklisted Italian Eni from its energy projects because of its cooperation with the Greek Cypriot government. The Turkish Cypriot government, who is also carrying out exploration work with Turkey, has declared that it is ready to share the revenue with the Greeks.
The Cyprus problem is the main obstacle between Turkey and the European Union in its membership negotiations. Yıldız says that Turkey was open to the offer of carrying Greek Cypriot gas via Turkey, as long as Greek Cypriots recognize the revenue rights of the Turks and pay their share; that doesn’t mean political resolution, he adds, but political feasibility.
Politics in the region is gaining momentum in many different forms in today’s world.