CYPRUS OFFSHORE EXPLORATION: TALAT'S HALF-HEARTED

C O N F I D E N T I A L SECTION 01 OF 02 NICOSIA 000351 SIPDIS DEPT FOR UR/SE, EUR/RPM, L/EUR E.O. 12958: DECL: 06/01/2019 TAGS: PREL PARM MARR ECON EPET CY TU SUBJECT: CYPRUS OFFSHORE EXPLORATION: TALAT'S HALF-HEARTED PROTEST REF: A. 07 NICOSIA 120 ¶B. 07 NICOSIA 675 ¶C. 08 NICOSIA 813 ¶D. 08 NICOSIA 910 ¶E. NICOSIA 344 Classified By: AMB F C URBANCIC FOR REASONS 1.4 B AND D ¶1. (C) In a June 1 meeting with the Ambassador, Turkish Cypriot (T/C) leader Mehmet Ali Talat, complained that Greek Cypriot progress towards exploiting offshore energy assets with Houston-based Noble Energy, Inc. "affects the negotiations" and was a cause of concern given the "controversial nature of the issue." Talat argued that T/Cs have the same rights over natural resources as Greek Cypriots (G/Cs),noting that mineral rights would be a federal responsibility in a reunified Cyprus. In the past, Talat said, G/C President Demetris Christofias had responded to these objections by saying "we are preparing the ground in advance to share this wealth" but that this ignored the T/C right to be involved in this process as well. Talat does not intend to raise the matter with Christofias again because "I already know how he will answer." "We are expressing to you our views on this so that you can do something to stop this sort of activity - because it undermines the spirit of the talks," Talat concluded. ¶2. (C) The Ambassador explained that Noble is a private company that entered into a contract with the RoC to which the USG is not a party. Noble did not seek USG authority or backing for this venture. Noble understood the potential in teh Cyprus bloc on which it bid from its current operations in an adjacent field in the Israeli Exclusive Economic Zone (EEZ). He emphasized to Talat the USG desire to continue to help the island to reunify and offered to Talat to seek a legal opinion of the EEZ delimitation if that would be helpful, but it was unlikely that the USG would take a position on it. Talat's response was to throw out the idea of "taking Noble to a US court" although he immediately added that this seemed "overly ambitious." Limnitis -------------- ¶3. (C) Talat said that the leaders' representatives (Ozdil Nami and George Iacovou ) were still working on modalities to open the Limnitis/Yesilirmak crossing point, a stalled confidence building measure that has turned into a point of friction. He added that Nami and Iacovou, who happened to be meeting today regarding the issue, had hammered out a draft agreement at their last meeting. Talat dubbed that agreement "not bad", but said he had heard from unnamed Greek Cypriots that Christofias was not happy with it. Talat added, however, that Christofias did not raise Limnitis/Yesilirmak at their last tete-a-tete, on May 28. He thought that Christofias was avoiding the issue until after the June 6 European Parliamentary elections. Varosha -------------- ¶4. (C) In response to the Ambassador's request for assistance in allowing the Embassy to inspect abandoned AMCIT properties in the fenced-off city of Varosha, Talat said that the Embassy needed to apply through the "TRNC MFA" and refuted the Turkish "Ambassador's" May 22 comment to the Ambassador that Mr. Talat could be helpful in arranging such a visit per Reftel E. (Comment: Our take, supported by both the UN and candid contacts in the "TRNC MFA", is that the Turkish Military must approve all requests to visit Varosha. The Embassy has not been given access since 2005 despite making two formal requests. End Comment) ¶5. (C) Comment: Talat's heart was not in this discussion of gas exploration in teh Cyprus EEZ, even though he requested the meeting. His approach was desultory and pro forma. While saying that the negotiations were proceeding well, his body language and attitude indicated a man who is tired and viewed the offshore exploration issue as a distraction. We recommend the following as guidance if press asks for comment to the Turkish Cypriot reaction to the story that a U.S.-based company will explore for energy in Cyprus' EEZ: Begin Text: U.S. policy on this issue has not changed. The decision by an American company to enter into agreements with the Republic of Cyprus is a business decision, not a political one. All parties must exercise restraint. This controversy points to the need for all parties to continue to focus on forging a comprehensive solution to the Cyprus problem that will reunify the island into a bi-zonal, bi-communal federation. A final settlement will enable all Cypriots to benefit from the island's resources. End Text. Urbancic