International Crisis Group:
Eastern Mediterranean tensions have risen since late 2011, when Greek Cypriots unilaterally began drilling in their rich offshore hydrocarbon reserves and Turkey responded with tough criticism and threatening naval manoeuvres.
It argues that the Greek Cypriot government does not represent the interests of Turkish Cypriots or a united island, refutes Greek Cypriot claims to exclusive sovereignty, saying sovereignty is being negotiated in the current talks, and evokes its status as a guarantor state under the 1960 Treaty of Guarantee to protect Turkish Cypriots’ rights. Greek Cypriot drilling thus provoked a harsh reaction, with Ankara sending ships close to Greek Cypriot installations, signing maritime boundary agreements with the Turkish Cypriots, delineating the continental shelf between the Turkish coast and the north of the island, beginning its own gas prospecting off Cyprus, and announcing it will drill on land in the north on behalf of Turkish Cypriots.
Vague Greek Cypriot promises of sharing gas revenues in the future do not satisfy the Turkish Cypriot community.
This is highly unlikely in the current circumstances, meaning Greek Cypriots may choose a more expensive liquefied natural gas (LNG) option, bypassing Turkey and Turkish Cypriots.
The prospect of this costly tit-for-tat should make all recommit to a comprehensive settlement to reunify the island, divided politically since Greek Cypriots seized control of the Republic of Cyprus in 1963 and militarily since a Turkish invasion in 1974 created a Turkish Cypriot zone on its northern third. Greek and Turkish Cypriots have agreed that natural resources and international agreements, including those delineating maritime boundaries, will be a federal competence in a reunited island.
The UN, Turkey and Turkish Cypriots see a natural deadline when the Republic of Cyprus takes over the rotating EU presidency on 1 July 2012.
Even in the absence of an overall Cyprus settlement, the parties should re-examine the benefits of independent confidence-building moves, seek mutual advantage and avert a deepening of the crisis by taking these steps specific to the energy issue: The Greek Cypriot leadership should commit to share 20 per cent of any net revenue or gas from any offshore hydrocarbon resources with Turkish Cypriots, possibly distributed through a UN-supervised arrangement, as long as both parties remain formally committed to reunification. Turkish Cypriots should commit to share with the Greek Cypriots an inverse proportion of their hydrocarbon revenues from their ongoing onshore drilling activities.