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Cyprus: A Greek tragedy unfolds

THE GREEK Cypriot decision to press ahead with offshore exploration has drawn an angry response from Turkey and dark warnings about instability in the region. But given that it is, as the US ambassador noted last month, Cyprus' sovereign right to explore these areas, there is a feeling that Turkey's bluster has more to do with domestic politics and does not signal an impending confrontation.

The Cypriot government, in February, officially launched an offshore licensing round, inviting foreign firms to apply for licences to explore for oil and gas in 11 blocks, totalling nearly 27,000 square miles of southern Cypriot Mediterranean waters. Cyprus says five international companies have expressed an interest; these are reported to be from Russia, China and the US.

The launch of the round follows a deal signed in January between Lebanon and Greek Cyprus to explore for oil and gas off the eastern Mediterranean. A similar agreement was signed between Greek Cyprus and Egypt last year.

Turkey's response was to label the licensing round as a provocation. "We expect Greek Cyprus to end its initiatives to launch international tenders that violate the joint rights of the island's two communities and amount to a fait-accompli," the Turkish foreign ministry said in a written statement. "Continuation of the tender process will adversely affect peace and stability on the island of Cyprus and in the eastern Mediterranean."

However, the Turkish government also claims oil and gas rights in the area. The Turkish energy minister, Hilmi Guler, said in February that state-owned TPAO would start exploring in the eastern Mediterranean, off the southern cities of Antalya, Iskenderun and Mersin.

Here, say analysts, is where the danger begins. According to John Daly of the The Jamestown Foundation, a think-tank, under the Article 22 of the 1982 Third UN Convention on the Law of the Sea, the Mediterranean is regarded as a "semi-enclosed sea", with competing claims by 21 coastal states with delimited sovereign rights over exclusive maritime economic zones. Turkey and Greece, therefore, have overlapping maritime, air, territorial, and boundary disputes in the Aegean. Indeed, Guler has acknowledged that the areas designated by the Turkish and the Greek Cypriot government for oil exploration might overlap.

This is not the first time this issue has arisen. Turkey and Greece came close to war in the 1987 over the issue of oil prospecting in the Aegean and, in 1996, a 26-hour standoff between Greek and Turkish coastguard vessels off the uninhabited island of Imia (Kardak) nearly resulted in fighting.

The issue has the potential for serious repercussions. However, most analysts say conflict is unlikely and exploration will probably go ahead, albeit perhaps more gradually than the Cypriot government would like. After the two sides nearly came to blows in 1996, the governments, under pressure from Nato, instituted a series of military confidence-building measures designed to prevent clashes. "These efforts could well be extended to cover the Cyprus oil dispute," says Daly.

There is also some suspicion that Turkey's strong words on the subject are designed to cause companies to pause for thought before applying for licences – Turkey has already berated Egypt and Lebanon for striking deals with Cyprus – and to appeal to a domestic audience rather than to indicate that it is spoiling for a fight. With the Turkish government facing elections this year, its hard line may play well with an electorate that is increasingly nationalistic and less enraptured with joining the EU. The European Commission has said Cyprus has the sovereign right to sign international agreements.

"The Turkish government has taken an increasingly nationalist stance on a number of issues, not least energy. This includes painting a picture of a government keen to defend national security, which has sometimes resulted in a rather isolationist policy, depicting Turkey facing a lone struggle, its potential misunderstood by outsiders – be they the EU, the US or closer to home," says Andrew Neff, an analyst at Global Insight, a consultancy.

While a big oil and gas find would probably ratchet up the tension between Cyprus and Turkey, some even question whether there are any big reserves there at all. There have been substantial oil and gas finds in Egypt's Nile Delta and media reports talk of as much as 10bn barrels of oil equivalent lying under the seabed. But Panos Papanastasiou, head of the department of civil and environmental engineering at the University of Cyprus, is more guarded: "There is no way of knowing whether there is oil out there or how much."n

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