2015年-CEPS欧洲政策研究中心_Fishing_for_Gas_and_More_in_Cypriot_Waters_8页_613kb

Summary of "Fishing for Gas and More in Cypriot Waters"

Core Content

This policy brief examines the intersection of economic opportunity and political conflict in Cyprus, particularly in relation to its offshore gas discoveries and the implications for its Exclusive Economic Zone (EEZ) and the broader geopolitical landscape. The key issue is the ongoing dispute between the Republic of Cyprus and Turkey over the legal boundaries and rights to exploit these natural resources. The brief argues that resolving this conflict is not only beneficial for Cyprus's economy but also for regional stability and improved relations between Turkey and the European Union.

Main Points

• Economic Opportunity: Cyprus has discovered significant offshore gas reserves, estimated at up to 7 trillion cubic feet (tcf) in the Aphrodite field. These reserves could generate substantial economic benefits, potentially reaching $39.6 billion at a low price estimate, which is far greater than Cyprus's current public debt and could exceed the possible Eurozone bailout amount.

• Political Tensions: The dispute over the EEZ and continental shelf boundaries has led to escalating tensions between Cyprus and Turkey. Turkey refuses to recognize Cyprus's EEZ rights, arguing that the island remains divided and thus cannot represent Northern Cyprus in a unified EEZ. This stance has been reinforced by Turkey's support for Northern Cyprus's claims to parts of Cyprus's EEZ, including the southern and southeastern sectors.

• Legal Framework: The United Nations Convention on the Law of the Sea (UNCLOS) provides a legal basis for maritime boundaries and undersea resource rights. While Turkey has not acceded to UNCLOS, it is still bound by its principles as part of customary international law. The delimitation process involves a three-stage approach, with the potential for adjustments based on equitable considerations.

• Transport and Commercialization Options: Several options for transporting and monetizing the gas have been proposed, including pipelines to Greece and Turkey, and the use of Liquefied Natural Gas (LNG) for more flexible exports. The LNG option is considered more promising due to its flexibility and potential for better commercial terms, though it requires significant investment.

• Need for a New Approach to Peace Process: The brief suggests that the current comprehensive and stalled peace negotiations should be replaced with a more pragmatic "Plan B" approach, focusing on achieving an interim agreement that addresses the most pressing issues first. This includes resolving property disputes, improving transport and trade relations, and establishing a simplified federal structure that allows for self-governance of both communities while aligning with EU principles.

Key Information

• Gas Reserves and Revenue Potential: The Aphrodite gas field could generate up to $40 billion in total value, with annual government revenue potentially reaching $1 billion if a 50% share is taken. This is a significant sum for Cyprus's economy, though not enough to cause "Dutch disease" effects.

• International Recognition: The EU and US recognize Cyprus's EEZ, which strengthens its legal position. However, Turkey's non-accedence to UNCLOS and its support for Northern Cyprus complicate the situation.

• Turkey's Claims and Actions: Turkey claims parts of Cyprus's EEZ, particularly the southeastern area, and has sent seismic research vessels and threatened to drill there. It also supports Northern Cyprus's claims, which are considered implausible and politically motivated.

• Transport Challenges: Developing export infrastructure is a major challenge. A pipeline to Greece is politically attractive but costly and logistically complex. An LNG option is seen as more viable due to its flexibility and potential for higher market prices.

• Interim Settlement Proposal: A simplified federal structure with self-governance for both communities, minimal federal competences, and a single international personality and sovereignty is proposed as a realistic and beneficial interim solution. This model is inspired by the Belgian federal system and aligns with the EU principle of Subsidiarity.

• Property and Trade Settlements: The Immovable Property Commission (IPC) has processed over 200 cases, with many resolved through friendly settlements. The brief suggests that such micro-settlements could serve as a stepping stone towards a broader resolution.

Conclusion

The brief concludes that the discovery of offshore gas presents a unique opportunity for Cyprus to shift from the current impasse in the peace process towards a more constructive and practical resolution. It argues that all parties involved stand to benefit from a resolution that includes interim agreements on economic and territorial matters, as well as a reduction in military presence and improved diplomatic relations. The call is for a paradigm shift in political leadership to prioritize conflict resolution, reconciliation, and the development of Cypriot gas resources.