TURKEY FOCUSED ON POLITICAL PRESSURE TO STOP

C O N F I D E N T I A L ANKARA 000474 SIPDIS SIPDIS DEPT FOR OES CARVIS E.O. 12958: DECL: 03/01/2017 TAGS: EPET EWWT PGOV PREL TU CY SUBJECT: TURKEY FOCUSED ON POLITICAL PRESSURE TO STOP CYPRIOT OIL AND GAS EXPLORATION REF: NICOSIA 120 Classified By: ECON/C Tom Goldberger for reasons 1.4 b and d. ¶1. (C) Summary: Recently announced plans by the Republic of Cyprus to move ahead with a licensing round for offshore oil exploration (reftel) are of great concern to Turkey. Although Turkey claims rights to the area in question under the Law of the Sea, Foreign Ministry officials say they will rely on diplomacy, especially with Egypt and Lebanon, to prevent the planned exploration from moving forward. Despite comments attributed to Turkish officials, Turkey's ability to undertake similar offshore activities is limited and there do not appear to be specific plans in the works. Turkey may turn to a more aggressive strategy if it finds the international community is not taking its concerns seriously. End summary. -------------- GOT RELYING ON POLITICAL PRESSURE FOR NOW -------------- ¶2. (C) The Cypriot Government's announcement that it would go forward with a first licensing round for the exploration and exploitation of potential offshore oil and natural gas deposits (reftel) touched off great concerns among the Turkish public and Turkish officials. Foreign Ministry Maritime Affairs officials told us Turkey would pressure Lebanon and Egypt to step back from the recently signed Exclusive Economic Zone (EEZ) agreements and consider the political implications. They made the legal argument that since the Mediterranean is a semi-enclosed sea, the Law of the Sea requires that a country must consult all other countries bordering the sea when delineating jurisdiction, something they claim the GOC did not do prior to signing the EEZ agreements or announcing the tender. In addition, Turkey claims jurisdiction for some areas west of 32 degrees, 16 minutes, 18 seconds, and believes it has rights to six of the 13 GOC-designated areas. ¶3. (SBU) In addition to the legal argument, the MFA stressed the political argument that the Greek Cypriots do not exercise sovereignty over the entire island and therefore cannot sign agreements that affect the northern half without taking the views of the Turkish Cypriots into consideration. Furthermore, they believe the agreements increase incentives for Greek Cyprus to continue to deflect efforts to find a political solution to the Cyprus issue. Turkish objections have been conveyed to the UN and other internty of the Cyprus problem," and "refrain from actions that may harm the search for a comprehensive settlement." -------------- --- LARGE COMPANIES INTERESTED BUT SITUATION COMPLEX -------------- --- ¶4. (C) BP representatives in Turkey told us BP is interested in the Cyprus off-shore blocks because of their proximity to Egypt Nile delta off-shore gas fields on which they are active. They described the Cyprus blocks as "frontier" because they are completely unexplored. BP said that the Turkish embassy in London had approached their UK headquarters with Turkey's concerns. BP informed told the embassy the company had decided to purchase the seismic data, as a prerequisite to potential participation in the tender - after a six-month analysis period. BP characterized this as a long-term process and noted they would assess all the information before taking any other action. BP is well aware of the importance of Turkey to its global operations, including the BTC oil pipeline, the South Caucasus gas pipeline, and Bosphorus shipping, and these would factor into a decision on tender participation. BP is has also made informal contacts with the Turkish navy, which said that it is monitoring the situation closely, but has no intention to intervene with force. ¶5. (C) Perhaps mindful of the inconsistency, MFA and Turkish energy ministry officials downplayed initial statements attributed to Turkish officials that state oil company TPAO would pursue its own hydrocarbon exploration in the disputed area. They told us there are no specific plans in this regard and note that TPAO has limited capacity of its own, although it could always work with foreign contractors. BP said that TPAO has an old seismic vessel which had done limited exploration in the Aegean. The company also said that the waters north of the "TRNC" are less attractive geologically. -------------- WITH THE CYPRUS ISSUE, ANYTHING IS POSSIBLE -------------- a political settlement to the Cyprus question. If as the situation unfolds the GOT feels that the international community, including its Mediterranean neighbors, is not seriously considering its concerns, the Turks may deploy a more aggressive strategy that could escalate tensions. Visit Ankara's Classified Web Site at http://www.state.sgov.gov/p/eur/ankara/ WILSON