Corona pandemic, energy prices and power-play in Eastern Mediterranean

by Antonis D. Papagiannidis

In an effort to rebuff criticism over a bill brought to (and voted in) Parliament that will allow for (i.a.) hydrocarbon explorations to be undertaken in protected Natura regions of Greece, Energy-and-Environment Minister Kostis Hadjidakis shrugged away objections pointing out that curent energy prices make the whole discussion a matter of theoretical interest. He was right.

Which once more brings to the limelight the recurring consequence of Greek over-politicised foot-dragging in the energy/natural resources front. Whenever promising steps are taken to start down the long, tough, costly, demanding and foreign-policy-sensitive path of oil and/or natural gas exploration and development, obstacles tend to pop up. Environmental issues, licencing bureaucracy, political infighting: when the pace quickens, when the goal looks within reach whether for exploration drilling to start at the Ionian Sea and in the mainland (Epirus or Western Peloponnesus), or for the activation of claims to be awarded in the more geopolitical-sensitive areas South of Crete, then a fall in the price of oil and natural gas voids all such initiatives of effective content. Or even of tangible promise. Such is the set-up in mid-2020 for Greece, just when ExxonMobil, Total and ELPE (40-40-20) were supposed to activate seismic surveys West-and-South of Crete (To be true, ExxonMobil had already started reconsidering its overall European presence; this is another story).

In the far more promising Cyprus configuration , ENI and Total have announced that they are postponing (for Spring 2021) drilling operations at Block 6 of the Cyprus EEZ (Cronus field) that were planned for April-May 2020. ExxonMobil and Qatar have also moved their own project to the summer of 2021, at Block 10. The official explanation offered is that the coronavirus pandemic makes it impossible for drillship crews to move around, while supply chains of crucial materials are also disrupted. Nobody would believe that the plunge of energy prices is absent for this environment, too.

All of which would be another case of geo-economic fatalism: when people plan ahead in energy matters, God sneers (Fukushima for nuclear, oil futures at negative prices for shale oil/natural gas).

But if one keeps looking at the overall Eastern Mediterranean area, one is bound to notice that there is an actor who stubbornly keeps moving: Turkey. Just days after exploration drilling by Turkish drillship Yavuz was completed at the Cypriot EEZ, renewed Turkish presence is announced in areas where the Republic of Cyprus had granted concessions to oil majors.  Coronavirus has hit Turkey head-on; the Turkish economy is reeling under successive waves – but Ankara keeps asserting its position.

Cypriot Permanent Representative to the UN Andreas Mavrogiannis expressed his country’s dismay with Turkish illegal presence on Cypriot EEZ and continental shelf – but nobody in the corridors of power feels really moved. EU-decided sanctions are no more than a slap on the wrist.  Moreover, moving West-wards in the Mediterranean one meets with renewed Turkish activity within the (self-styled) MOU for sea-areas delimitation between Turkey and Libya. After a long wait, the EU naval operation Irini/peace has started, supposedly to dissuade Turkey from arming Libya (an international arms embargo in place – to little avail); but a “too little – too late” feeling prevails.