Shipping: the game-changer in politics?
E DII TO RII A L
It’s been a handful of years since Cypriots became ecstatic with the potential of oil and gas discoveries, with non-expert politicians making promises about how they would get crispy euros into the pockets of voter-citizens, making this a lucrative means to get the people to reject any form of solution to the Cyprob. Since then, the energy dream has almost but vanished, the excitement has subsided and business logic has gradually (but slowly) started to overcome nationalistic sentiment.
Turkey’s well anticipated arrogance did not help either, trying to poke its nose in other people’s business, once again based on an irrational sense of populism as opposed to the long-term ideals of the public good. Having seen with its own eyes the survey results from the Barbaros explorer, it realised that the Cyprus offshore gasfields would be beyond its reach and well outside the boundaries of the Turkish Cypriot “constituent state”, in the case of a federal solution.
This hardline attitude from Ankara has also misguidedly extended into the maritime sector, where apart from its low-labour cost shipyards, the Turkish flag has a minimal presence in ship-owning and ship-management, and nowhere near the experience and knowhow that the Cyprus-based companies have.
The fact that Cyprus is building up, brick by brick, its energy upstream (exploration) sector, with the maritime fleet possibly contributing to a midstream (transport) industry, the only thing missing from the puzzle is the final piece of ‘downstream’ distribution (pipelines, marketing, refineries). With Egypt as yet undecided about its future needs for natural gas and the recent discovery in the Zohr gasfield possibly overturning Cypriot prospects for exports, it is only a matter of time that our other exporting neighbour, Israel, rekindles its one-time love relationship with Ankara and revises plans to pipe gas overland via Ankara to western European consumers.
As Israel would probably need to share the initial section of its undersea pipelines with Cyprus, this is where the Cypriot maritime sector comes in, as a global slowdown in consumer consumption and, hence, a slowdown in deliveries of raw materials to the Far East and re-export of goods, will make shipowners re-allocate their fleets, so that energy is shipped from the eastern Med to nearby refineries or pipelines, such as in Turkey.
Although Cyprus shipping would greatly benefit from a solution to the 41-year problem and the opening up of Turkish ports, in fact, Ankara (whatever regime is ruling) would benefit far more from a close partnership with Cyprus, beyond the other logistical benefits such as abandoning its financial support to the statelet in the north and maintaining a costly military presence on the island.
After all, a solution does not necessarily mean that Cypriots will go to bed with Turkey. They just need to have a respectable business agreement, as is the case with Israel, where relationships have yet to fully warm to a mutually beneficial level.