Source: Boiling Frogs Post
F. William Engdahl
The
discovery in late 2010 of the huge natural gas bonanza off Israel’s
Mediterranean shores triggered other neighboring countries to look more
closely at their own waters. The results revealed that the entire
eastern Mediterranean is swimming in huge untapped oil and gas reserves.
That discovery is having enormous political, geopolitical as well as
economic consequences. It well may have potential military consequences
too.
In
December 2010, as it seemed the Greek crisis might still be resolved
without the by-now huge bailouts or privatizations, Greece’s Energy
Ministry formed a special group of experts to research the prospects for
oil and gas in Greek waters. Greece’s Energean Oil & Gas began
increased investment into drilling in the offshore waters after a
successful smaller oil discovery in 2009. Major geological surveys were
made. Preliminary estimates now are that total offshore oil in Greek
waters exceeds 22 billion barrels in the Ionian Sea off western Greece
and some 4 billion barrels in the northern Aegean Sea.[1]
Notably,
the IMF and EU governments, among them Germany, demand instead that
Greece sell off its valuable ports and public companies, among them of
course, Greek state oil companies, to reduce state debt. Under the best
of conditions the asset selloffs would bring the country perhaps €50
billion.[5] Plans call for the Greek state-owned natural gas company, DEPA, to privatize 65% of its shares to reduce debt.[6] Buyers would likely come from outside the country, as few Greek companies are in a position in the crisis to take it.
In
July 2011 Washington joined the Greek energy Sirtaki. Secretary of
State Hillary Clinton flew to Athens with energy on her mind. That was
clear by the fact she brought with her her Special Envoy for Eurasian
Energy, Richard Morningstar. Morningstar was husband Bill Clinton’s
Special Advisor to the President on Caspian Basin Energy Diplomacy, and
one of the Washington strategic operatives in the geopolitical battles
to dismember the Soviet Union and surround a chaos-ridden Russia with
hostile pro-NATO former states of the USSR. Morningstar, along with his
controversial aide, Matthew Bryza, have been the key Washington
architects of Washington’s geopolitically-motivated oil and gas pipeline
projects that would isolate Russia and its Gazprom gas resources from
the EU. Bryza is an open opponent of Russian Gazprom’s South Stream gas
pipeline that would transit the eastern Mediterranean states.[10]
Clearly the Obama Administration is not at all neutral about the new
Greek oil and gas discoveries. Three days after Hillary left Athens the
Greek government proposed creation of a new government agency to run
tenders for oil and gas surveys and ultimate drilling bids.
# # # #
Endnotes:
F. William Engdahl
Rising Energy Tensions in the Aegean—Greece, Turkey, Cyprus, Syria
The
discovery in late 2010 of the huge natural gas bonanza off Israel’s
Mediterranean shores triggered other neighboring countries to look more
closely at their own waters. The results revealed that the entire
eastern Mediterranean is swimming in huge untapped oil and gas reserves.
That discovery is having enormous political, geopolitical as well as
economic consequences. It well may have potential military consequences
too.
Preliminary exploration has confirmed similarly impressive reserves
of gas and oil in the waters off Greece, Turkey, Cyprus and potentially,
Syria.
Greek ‘energy Sirtaki’
Not surprisingly, amid its disastrous financial crisis the Greek
government began serious exploration for oil and gas. Since then the
country has been in a curious kind of a dance with the IMF and EU
governments, a kind of “energy Sirtaki” over who will control and
ultimately benefit from the huge resource discoveries there.
In
December 2010, as it seemed the Greek crisis might still be resolved
without the by-now huge bailouts or privatizations, Greece’s Energy
Ministry formed a special group of experts to research the prospects for
oil and gas in Greek waters. Greece’s Energean Oil & Gas began
increased investment into drilling in the offshore waters after a
successful smaller oil discovery in 2009. Major geological surveys were
made. Preliminary estimates now are that total offshore oil in Greek
waters exceeds 22 billion barrels in the Ionian Sea off western Greece
and some 4 billion barrels in the northern Aegean Sea.[1]
The southern Aegean Sea and Cretan Sea are yet to be explored, so the
numbers could be significantly higher. An earlier Greek National
Council for Energy Policy report stated that “Greece is one of the least
explored countries in Europe regarding hydrocarbon (oil and gas-w.e.)
potentials.”[2]
According to one Greek analyst, Aristotle Vassilakis, “surveys already
done that have measured the amount of natural gas estimate it to reach
some nine trillion dollars.” [3] Even if only a fraction of that is available, it would transform the finances of Greece and the entire region.
Tulane University oil expert David Hynes told an audience in Athens
recently that Greece could potentially solve its entire public debt
crisis through development of its new-found gas and oil. He
conservatively estimates that exploitation of the reserves already
discovered could bring the country more than €302 billion over 25 years.
The Greek government instead has just been forced to agree to huge
government layoffs, wage cuts and pension cuts to get access to a second
EU and IMF loan that will only drive the country deeper into an
economic decline. [4]
Notably,
the IMF and EU governments, among them Germany, demand instead that
Greece sell off its valuable ports and public companies, among them of
course, Greek state oil companies, to reduce state debt. Under the best
of conditions the asset selloffs would bring the country perhaps €50
billion.[5] Plans call for the Greek state-owned natural gas company, DEPA, to privatize 65% of its shares to reduce debt.[6] Buyers would likely come from outside the country, as few Greek companies are in a position in the crisis to take it.
One significant problem, aside from the fact the IMF demands Greece
selloff its public oil interests, is the fact that Greece has not
declared a deeper exclusive economic zone like most other countries
which drill for oil. There was seen little need until now. An Exclusive
Economic Zone (EEZ) gives a state special mineral rights in its declared
waters under the Third United Nations Convention on the Law of the Sea
(UNCLOS), which came into force in November 1994. Under UNCLOS III, a
nation can claim an EEZ of 200 nautical miles from its coastline.[7]
Turkey has previously stated it would consider it an act of war if Greece drilled further into the Aegean. [8]
Until now that did not seem to have serious economic consequences, as
no oil or gas reserves were known. Now it’s an entirely different
ballgame.
Evangelos Kouloumbis, former Greek Industry Minister recently stated
that Greece could cover “50% its needs with the oil to be found in
offshore fields in the Aegean Sea, and the only obstacle to that is the
Turkish opposition for an eventual Greek exploitation.”[9]
Hillary dances the Sirtaki too…
In
July 2011 Washington joined the Greek energy Sirtaki. Secretary of
State Hillary Clinton flew to Athens with energy on her mind. That was
clear by the fact she brought with her her Special Envoy for Eurasian
Energy, Richard Morningstar. Morningstar was husband Bill Clinton’s
Special Advisor to the President on Caspian Basin Energy Diplomacy, and
one of the Washington strategic operatives in the geopolitical battles
to dismember the Soviet Union and surround a chaos-ridden Russia with
hostile pro-NATO former states of the USSR. Morningstar, along with his
controversial aide, Matthew Bryza, have been the key Washington
architects of Washington’s geopolitically-motivated oil and gas pipeline
projects that would isolate Russia and its Gazprom gas resources from
the EU. Bryza is an open opponent of Russian Gazprom’s South Stream gas
pipeline that would transit the eastern Mediterranean states.[10]
Clearly the Obama Administration is not at all neutral about the new
Greek oil and gas discoveries. Three days after Hillary left Athens the
Greek government proposed creation of a new government agency to run
tenders for oil and gas surveys and ultimate drilling bids.
Morningstar is the US specialist in economic warfare against Russian
energy diplomacy. He was instrumental in backing the controversial B-T-C
oil pipeline from Baku through Tbilisi in Georgia across to the Turkish
Mediterranean port of Ceyhan, a costly enterprise designed solely to
bypass Russian oil pipeline transit. He has openly proposed that Greece
and Turkey drop all historic differences over Cyprus, over numerous
other historic issues and agree to jointly pool all their oil and gas
reserves in the Aegean Sea. He also has told the Greek government it
should forget cooperation with Moscow on the South Stream and
Bourgas-Alexandroupolis gas pipeline projects. [11]
According to a report from Greek political analyst Aristotle
Vassilakis published in July 2011, Washington’s motive for pushing
Greece to join forces with Turkey on oil and gas is to force a formula
to divide resulting oil and gas revenues. According to his report,
Washington proposes that Greece get 20% of revenues, Turkey another 20%
and the US-backed Noble Energy Company of Houston Texas, the company
successfully drilling in the Israeli and Greek offshore waters, would
get the lion’s share of 60%.[12]
Secretary of State Hillary Clinton’s husband, Bill, is a Washington lobbyist for Noble Energy. [13]
And some Cyprus complications…
As if these geopolitical complications were not enough, Noble Energy,
has also discovered huge volumes of gas off the waters of the Republic
of Cyprus. In December 2011 Noble announced a successful well offshore
Cyprus in a field estimated to hold at least 7 trillion cubic feet of
natural gas. Noble’s CEO, Charles Davidson remarked to the press, “This
latest discovery in Cyprus further highlights the quality and
significance of this world-class basin.” [14]
Cyprus is a complicated piece of real estate. In the 1970’s as
declassified US Government documents recently revealed, then-US
Secretary of State Henry Kissinger actively encouraged and facilitated
arms to the Turkish regime of Kissinger’s former Harvard student and
then- Prime Minister Bulent Ecevit, to stage a military invasion of
Cyprus in 1974, in effect partitioning the island between an ethnically
Turkish north and an ethnically Greek Republic of Cyprus in the south, a
division which remains. The Kissinger strategy, backed by the British
was believed intended to create a pretext for a permanent US and British
military listening post in the eastern Mediterranean during the Cold
War.[15]
Today the ethnically Greek south, where Noble has discovered large
gas deposits, is a member of the EU. Its President, Demetris
Christofias, is the only national leader in the European Union who is a
communist. He is also a close friend of Israel, and of Russia. In
addition, he is a major critic of American foreign policy, as well as of
Turkey.[16]
Now Israel is planning to build an underwater gas pipeline from the
Israeli Levantine fields across Cyprus waters onto the Greek mainland
where it would be sold on the EU market. The Cyprus and Israel
governments have mutually agreed on delimitation of their respective
economic zones, leaving Turkey in the cold. Turkey openly threatened
Cyprus for signing the agreement with Noble Energy. That led to a
Russian statement that it would not tolerate Turkish threats against
Cyprus, further complicating Turkish-Russian relations. [17]
Turkish-Israeli relations, once quite friendly, have become
increasingly strained in recent years under the Erdogan foreign
policies. Ankara has expressed concern about Israel’s recent ties with
its historic antagonists, Greece and the Greek side of Cyprus. Turkey’s
ally the Turkish Republic of Northern Cyprus, fears it could miss out on
its fair share of the gas after Israel and Nicosia signed an agreement
to divide the 250 kilometers of sea that separate them.[18]
It becomes evident, especially when we glance at a map of the eastern
Mediterranean, that the oil and gas prospective bonanza there is a
rapidly unfolding conflict zone of tectonic magnitude involving
strategic US, Russian, EU, Israeli and Turkish, Syrian and Lebanese
interests.
F. William Engdahl is author of A Century of War: Anglo-American Oil Politics in the New World Order. He may be contacted through his website at www.engdahl.oilgeopolitics.net where this article was originally published.
Endnotes:
[1] Ioannis Michaletos, Greek Companies Step Up Offshore Oil Exploration—Large Reserves Possible, December 8, 2010, accessed in http://www.balkanalysis.com/greece/2010/12/08/greek-companies-step-up-offshore-oil-exploration-large-reserves-possible/.
[2] Ibid.
[3] Hellas Frappe, Hillary came to Greece to seal oil exploration deals!, July 21, 2011, accessed in http://hellasfrappe.blogspot.com/2011/07/special-report-hillary-came-to-greece.html.
[4] Chris Blake, Drilling for oil in the Aegean nay help ease Greece’s debt crisis, July 7, 2011, accessed in https://www.hellenext.org/reinventing-greece/2011/07/drilling-for-oil-in-the-aegean-may-help-ease-greeces-debt-crisis/
[5] Ibid.
[6] John Daly, Greece Considering Plugging Aegean Islands into Turkish Energy Grid, 22 November 2011, accessed in http://www.businessinsider.com/greece-considering-plugging-aegean-islands-into-turkish-energy-grid-2011-11.
[7] United Nations, United
Nations Convention on the Law of the Sea of 10 December 1982: PART VI:
CONTINENTAL SHELF, Article76, Definition of the continental shelf, accessed in http://www.un.org/depts/los/convention_agreements/texts/unclos/part6.htm.
[8] Chris Blake, op. cit.
[9] Ioannis Michaletos, op. cit.
[10] Hellas Frappe, op. cit.
[11] Ibid.
[12] Ibid.
[13] Hugh Naylor, Vast gas fields found off Israel’s shores cause trouble at home and abroad, January 24, 2011, accessed in http://www.thenational.ae/news/world/middle-east/vast-gas-fields-found-off-israels-shores-cause-trouble-at-home-and-abroad#full.
[14] Noble Energy Press Release, Significant Natural Gas Discovery Offshore Republic of Cyprus, December 28, 2011, accessed in http://www.maritime-executive.com/article/significant-natural-gas-discovery-offshore-republic-of-cyprus.
[15] Larisa Alexandrovna and Muriel Kane, New documents link Kissinger to two 1970s coups, June 26, 2007, accessed in http://rawstory.com/news/2007/Intelligence_officers_confirm_Kissinger_role_in_0626.html.
[16] Yilan, Cyprus conflict defies ready solution, May 30, 2011, accessed in http://turkeymacedonia.wordpress.com/2011/05/30/cyprus-conflict-defies-ready-solution/.
[17] Stephen Blank, Turkey and Cyprus Gas: More Troubles Ahead in 2012, Turkey Analyst, vol. 5 no. 1, 9 January 2011, accessed in http://www.silkroadstudies.org/new/inside/turkey/2012/120109B.html.
[18] Hugh Naylor, op. cit.
