Turkey and Shell sign energy exploration deal

November 24, 2011 | 09:30
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Turkey signed a deal with Anglo-Dutch energy giant Shell on Wednesday for exploration on Turkish soil and in the Mediterranean Sea that could further stoke tensions with Cyprus.

The contract between the state-owned Turkish Petroleum Corporation (TPAO) and Shell comes after Cyprus launched its own gas exploration projects off the south coast of the divided island in September.

Ankara does not recognise the Greek-Cypriot government of Cyprus and says it has no right to conduct offshore energy exploration while UN-backed talks on reunifying the eastern Mediterranean island continue.

Energy Minister Taner Yildiz, who oversaw the signing of the contract, however brushed aside claims that with the agreement Turkey was retaliating against Cyprus's moves.

"This signature is the result of technical work, which has nothing to do with international speculation," Yildiz said at the signing ceremony.

Wednesday's deal covers seismic research off the Mediterranean province of Antalya as well as onshore drilling work concentrated around the southeastern province of Diyarbakir, TPAO chief executive Mehmet Uysal said.

Uysal said seismic research will be conducted off Antalya until 2014 and then exploratory drilling would begin, adding that drilling expenses would be met by partner Shell.

"Shell and TPAO will share output equally if we find oil or gas. As production increases, the TPAO share will also increase," he said.

The internationally-recognised government of Cyprus provoked Turkish anger when it struck a deal with US energy company Noble for exploratory drilling off the south coast of the island.

Turkey retaliated by sending a ship to explore for gas in the Mediterranean after signing an accord with the breakaway Turkish Republic of Northern Cyprus, which only Ankara recognises.

Malcolm Brinded, a senior executive director at Shell, praised his company's partnership with Turkey but declined to comment if he had any hesitations because of the political standoff between Ankara and Nicosia.

"I am really not going to comment on something which I think is really a matter of a government to resolve," he told AFP.

"But we are just very excited about the true opportunities ... Shell has a very long history in Turkey and I believe we will have a long and successful future."

Cyprus has been divided along ethnic lines since 1974, when Turkish troops occupied its northern third in response to an Athens-engineered coup in Nicosia aimed at union with Greece.

The Cyprus government, which says its hydrocarbon search is to the benefit of all Cypriots, has angered Turkey further by seeking to extend cooperation with Israel in the exploration and export of natural gas.

"From the beginning, we told both Israeli and Greek Cypriot governments... that those projects are against the international law," Yildiz said.

In order to legalise energy exploration activities off the island, he said, the island's Turks should equally benefit from energy resources.

Turkey and Israel have been locked in a bitter dispute since May 2010 when Israeli naval commandos stormed a convoy of six ships trying to reach the Gaza Strip in defiance of an Israeli naval blockade, killing nine people.

Yildiz said political disputes between countries had negative impacts on energy cooperation from time to time.

"Israel acting as if nothing had happened about the massacre of our nine citizens is naturally unacceptable for us," he said.

"Therefore, this represents a serious obstacle for our cooperation and energy projects we will develop together (with Israel)," he added.


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