Tag Archives: Turkey

Zion Oil Wars: U.S. secret mission sent to Jordan to control Syrian chemical weapons ( BP-Shell drilling in Jordan)

-Tony Hayward’s anglo-turkish oil firm Genel Energy today confirmed that drilling has now begun on its first well on the Chia Surkh exploration block in Iraqi Kurdistan.

The block spans 984 square kilometres in the southern part of the Kurdish region. It has an estimated 300 million barrels of prospective oil resources.

The Chia Surkh 10 well will be drilled to a total depth of 2,500 metres to test Lower Miocene to Palaeocene targets.

The well results are expected in the first quarter of next year.

Genel has a 60% interest in Chia Surkh. City broker Oriel Securities estimate that Chia Surkh is worth a ‘risked’ 38p per share at this stage.

The broker highlighted, in a note today, that Genel is hosting a capital markets day this week and it beleives the company is likely to update on the plans for the Miran gas development as well as its exploration programme – which now includes new licences in Malta, Morocco, Cote d’Ivoire and Somaliland.

Gazprom Neft, the oil arm of Russia’s top natural gas producer Gazprom, is still interested in Kurdistan’s oil, a Gazprom Neft source said, rebutting reports it had frozen projects in the Iraqi province.

In August, Gazprom Neft acquired interests in two blocks in Iraq’s Kurdistan region, after similar moves by international rivals angered the central Iraqi government in Baghdad.

The International Oil Daily cited Iraqi Oil Minister Abdul-Kareem Luaibi as saying Baghdad received a letter from Gazprom, in which the company said it had frozen the contract with Kurdistan.

“Gazprom Neft is still working on these projects. The company keeps its interest in Kurdistan,” a Gazprom Neft source told Reuters.

A company spokeswoman declined to comment.

Gazprom Neft already has a project in Iraq, near the Iranian border, where it expects to produce about 15,000 barrels per day from 2013.

Baghdad was angered by the plans of some international majors, including ExxonMobil, to tap oil and gas in the semi-autonomous region. The central government says the deals are illegal.

Later on Wednesday Iraqi Prime Minister Nuri al-Maliki is due to meet Russian President Vladimir Putin in Moscow where they may discuss energy issues.

Russia said on Tuesday it had signed $4.2 billion worth of arms deals with Iraq.

The Kurdistan Regional Government (KRG) is planning to build an oil pipeline to Turkey with a capacity of 1 million barrels a day, according to a report from Platts.

KRG natural resources minister Ashti Hawrami told an energy conference in Turkey on Thursday that plans were already in place for the construction of short spur lines from producing fields and that funding had been arranged for a main export line to carry crude from these fields to the border.

Plans are underway to launch a construction tender for the project, he added.

He said that initially the new line would connect with the existing Turkish section of the Kirkuk-Ceyhan oil line but that talks were underway with investors interested in building a new pipeline inside Turkey running from the border with northern Iraq to the Mediterranean port of Ceyhan.

“Any such pipeline will be an Iraqi pipeline…it will be for the benefit of all nations, all the Iraqi people and all the Turkish people,” Hawrami said.

“It is not designed to be anything else except supplying secure oil to the market,” he added in an apparent reference to recent talk that the KRG was planning its own oil export routes independent of the federal government in Baghdad.

Talk of building new pipelines through Turkey, which currently serves as an outlet for Iraqi crude oil produced in the north through the Mediterranean port of Ceyhan, has given rise to speculation that this might be a first step toward greater independence by the Kurdish province.

Hawrami stressed that the new pipeline would be Iraqi property on the Iraqi side of the border and Turkish on the Turkish and that the oil the line carried would remain the property of the Iraqi state.

“We believe that by 2015 we will safely reach 1 million bpd and by 2019, 2 million bpd,” Hawrami said.

Gulf Keystone, one of the biggest companies listed on London’s junior AIM stock market, is due to start the defence of its ownership of a huge oil field in Iraqi Kurdistan in a London court this week.

The company has long been touted as a potential acquisition target for an oil major looking for a foothold in Kurdistan, but the looming legal battle has been cited as a potential obstacle to any takeover deal.

Kurdistan is emerging as an attractive oil province for big western oil companies. Exxon Mobil, Total and Gazprom have all taken acreage there over the last year, lured by the lucrative terms on offer in Iraq’s semi-autonomous northern region.

Gulf Keystone will contest claims made by Excalibur Ventures LLC at the English Commercial Court. The claimant, which commenced legal action in 2010, asserts it is entitled to an interest of up to 30 percent in all of Gulf Keystone’s blocks in Kurdistan.

Gulf Keystone’s prize asset in Kurdistan is the Shaikan field, which could hold up to 15 billion barrels of oil – a volume which would make it one of the biggest discoveries made anywhere in recent years.

Under legal orders, Excalibur has paid 6 million pounds ($9.6 million) to the court as security for Gulf Keystone’s legal costs, and 3.5 million as security for the costs of Texas Keystone, a U.S.-based company against which it has also made the claims.

Texas Keystone, a company founded by Gulf Keystone Chief Executive Todd Kozel and of which he is still a director, holds a small interest in the Shaikan field in trust for Gulf Keystone.

Kozel, whose expensive divorce attracted media coverage nine months ago, is one of Britain’s highest-paid executives, having earned around $20 million in 2011.

The court case, which is expected to take between 10 and 12 weeks, was scheduled to start on Wednesday but was delayed by the judge.

Shares in Gulf Keystone closed at 205.75 pence on Tuesday, down over 50 percent from an all-time high reached in February, and valuing the company at about 1.75 billion pounds.

U.S. secret mission sent to Jordan to control Syrian chemical weapons: report

The United States military has secretly sent a task force of more than 150 planners and other specialists to Jordan to help the armed forces there to prepare for the possibility that Syria could lose control of its chemical weapons and be positioned should the turmoil in Syria expand into a wider conflict, a report published by the New York Times on Wednesday said.

The secret mission, led by a senior American officer, will also help in handling the estimated 180,000 Syrian refugees who have crossed the border and are severely straining the country’s resources, the report said.
The task force is based at a Jordanian military training center built into an old rock quarry north of Amman.

According to the report, U.S. officials familiar with the operation said the mission includes drawing up plans to try to insulate Jordan, a strong U.S., from the upheaval in Syria and to avoid the kind of clashes now occurring along the border of Syria and Turkey.

“We have been working closely with our Jordanian partners on a variety of issues related to Syria for some time now,” George Little, the Pentagon press secretary, was quoted as saying by the New York Times. He added that a specific concern was the security of Syria’s stockpiles of chemical and biological weapons. “As we’ve said before, we have been planning for various contingencies, both unilaterally and with our regional partners.”

The Obama administration has declined to intervene in the Syrian conflict beyond providing communications equipment and other non-lethal assistance to the rebels. However, the outpost near Amman could play a broader role should U.S. policy change.

The New York Times mentioned that there were no comments on the U.S. military operation from neither the Pentagon nor the Jordanian Embassy in Washington.

Analysts have always said that the Syrian regime of President Bashar al-Assad might deliberately force the Syrian conflict to spill over beyond the Syrian borders in order to keep the world’s attention away from the violence committed against civilians inside Syrian.

Over the past week, Syria and Turkey have exchanged artillery and mortar fire across Syria’s northern border. In western Syria, intense fighting recently broke out in villages near the border crossing that leads to the Bekaa Valley in Lebanon. To the east, the Syrian government has lost control of some border crossings, including the one near al-Qaim in Iraq.

Recent scuffles have also broken out between the Syrian military and Jordanians guarding the country’s northern border, where many families have ties to Syria.

Jordan, which was one of the first Arab countries to call for Assad’s resignation, has become increasingly concerned that Islamic armed groups, coming to join the fight in Syria, could cross the porous border between the two countries.

Al Arabiya has recently revealed that Assad gave instructions for his agents to try to ignite unrest in Jordan. According to “classified intelligence documents” leaked to Al Arabiya, Assad gave orders to provide peaceful protesters, who call for reform in Jordan, with weapons.

According to the New York Times report, the U.S. mission in Jordan quietly began this summer. In May, the U.S. organized a major training exercise, which was dubbed Eager Lion. About 12,000 troops from 19 countries, including Special Forces troops, participated in the exercise.

After it ended, the small American contingent stayed on and the task force was established at a Jordanian training center north of Amman. It includes communications specialists, logistics experts, planners, trainers and headquarters staff members, the report mentioned citing American officials.

Defense Secretary Leon E. Panetta met in Amman in August with King Abdullah II of Jordan. Panetta was then followed in September by Gen. James N. Mattis, the head of Central Command, who met with senior Jordanian officials in Amman.

Members of the American task force are spending the bulk of their time working with the Jordanian military on logistics — figuring out how to deploy tons of food, water and latrines to the border, for example, and training the Jordanian military to handle the refugees, the report said.

Jordan is currently hosting around 100,000 Syrians who have either registered or are awaiting registration, the United Nations said.

Royal Dutch Shell PLC (RDSA) has drilled more than 100 wells in Jordan in the two years since it a concession agreement to explore for oil from the country’s vast oil shale reserves, a person familiar with the project said.

Shell signed a production-sharing agreement with Jordan in May 2009 and pledged to spend some $500 million for exploration, assessment and designs on the project. The project aims at exploring for and, if successful, developing and producing oil from Jordan’s vast oil shale resources that are estimated at 40 billion metric tons. Many analysts now see oil shale–an unconventional form of oil contained in difficult-to-extract reservoirs–as a serious rival to crude.

Shell is mobilizing two rigs in the project that covers an area of 22,000 square kilometers from northern Jordan and west Safawi to Azraq in the middle and Sirhan and al-Jafer in the south. A third rig will be mobilized next year, the person told Dow Jones Newswires.

If the exploration proves successful Shell would invest billions of dollars and produce thousands of barrels of oil a day, the person said. Jordan signed similar agreements with companies such as U.K.-registered Jordan Energy & Mining Ltd., or JEML, and Estonian EESTi Energy.

Jordan, home to around 6 million people, imports some 100,000 barrels of oil a day, which constitutes around 98% of its energy needs.

BP last week began drilling the first well in its concession in the Risha natural gas field in eastern Jordan, near the border with Iraq, the British oil major said on Monday.

The drilling follows two years of preparation and a “very successful 5,000 square km seismic acquisition program in 2011”, BP said.

The well is expected to take three to four months to complete, and a number of international oil and gas service contractors as well as local firms are involved, it said.

Jordanian officials hope intensive exploration and drilling at Risha will lead to the discovery of extensive recoverable gas reserves, which will help cut dependence on oil imports to fuel Jordan’s power sector and industries.

Risha, which was discovered in 1987, has not delivered encouraging exploration results in the past.

In 2009, BP was given up to four years to spend at least $237 million to explore and evaluate the Risha block, which covers an area of 7,000 square km, Jordanian officials said.

If the exploration leads to the discovery of large commercially viable reserves of natural gas, officials said BP would enter a second phase to invest billions of dollars in developing the field.

BP said the seismic survey “was one of the largest ever acquired in the Middle East and one of the safest and highest-productivity surveys acquired in BP history.”

The government strategy calls for Risha to produce 330 million cubic feet of gas per day by 2015. The field has a current modest daily output of about 18 million cubic feet.

The kingdom, which imports most of its energy, is struggling to meet electricity demand, which is growing by more than 7 percent per year, due to fast growing population and rising industrial needs.

Zion Oil Executes Memorandum of Understanding Regarding Drilling Partnership

Dallas, Texas and Caesarea Israel – June 4, 2012 – Zion Oil & Gas, Inc. (“Zion Oil”) (NASDAQ GM: ZN) announced today that the Company recently signed a Memorandum of Understanding (MoU) with Lapidoth Israel Oil Prospectors Corp. Ltd. (“Lapidoth”), a forerunner of onshore oil prospecting in Israel. Lapidoth was incorporated in 1959 and its securities are traded on the Tel Aviv Stock Exchange.

The MoU, effective June 4, 2012, outlines plans to establish a company, tentatively named “Zion-Lapidoth Drilling”, which is to locate and purchase a drilling rig suitable for drilling wells to a depth of up to 25,000 feet. The MoU contemplates that Zion-Lapidoth Drilling will be 50% owned by Zion Oil and 50% by Lapidoth. The anticipated cost of the drilling rig is up to US$ 15 million and each party will share equally in the financing of Zion-Lapidoth Drilling.

The MoU provides that Zion Oil will retain Zion-Lapidoth Drilling for its drilling program and when not required by Zion Oil, Zion-Lapidoth Drilling may lease the drilling rig to third party oil and gas drilling entities.

The MoU is subject to certain standard conditions, including the execution of definitive purchase agreements, obtaining required approvals and the completion of acceptable due diligence by the parties. Additionally, the implementation of the MoU is subject to Zion raising at least US$ 10 million within the next 12 months.

The MoU provides that for the next 12 months Lapidoth will have a right of first refusal to drill wells, as needed, in accordance with Zion Oil’s work program.

Zion’s Founder and Chairman, John Brown, said today, “The signing of this MoU marks a significant milestone in the life of Zion Oil & Gas. We are looking forward to the future expectantly and the partnership with Lapidoth Israel Oil Prospectors Corp. Ltd helps solidify our commitment to drill our prospective exploratory wells.”

Zion’s Chief Executive Officer, Richard Rinberg, noted, “The partnership with Lapidoth helps to alleviate a longstanding concern about our ability to continue to drill exploratory wells in Israel without dependence on an outside third party. Zion will also benefit from Lapidoth’s significant experience in operating drilling projects in Israel. We believe that the ultimate establishment of Zion-Lapidoth Drilling will take Zion Oil, as a business, to a completely new level.

We remain excited about the possibility of recovering hydrocarbons on our license areas, onshore Israel, especially due to the U.S. Geological Survey report, published in April 2010, containing their assessment that there may be 1.7 billion barrels of recoverable undiscovered oil and 122 trillion cubic feet of recoverable gas in the Levant Basin, as all of Zion’s exploration rights fall within the area of the Levant Basin.”

Zion’s common stock trades on the NASDAQ Global Market under the symbol “ZN” and Zion’s warrants trade under the symbol “ZNWAW, ZNWAZ and ZNWAL”.

Zion Oil & Gas, a Delaware corporation, explores for oil and gas in Israel in areas located onshore between Haifa and Tel Aviv. It currently holds three petroleum exploration licenses, the Joseph License (on approximately 83,272 acres) and the Asher-Menashe License (on approximately 78,824 acres) between Netanya, in the south, and Haifa, in the north and the Jordan Valley License (on approximately 55,845 acres), just south of the Sea of Galilee. The total license area amounts to approximately 217,941 acres.

FORWARD LOOKING STATEMENTS: Statements in this communication that are not historical fact, including statements regarding Zion’s planned operations, geophysical and geological data and interpretation, the successful establishment of the drilling subsidiary and the negotiation and execution of definitive agreements with Lapidoth with respect thereto, the presence or recoverability of hydrocarbons, sufficiency of cash reserves, ability to raise additional capital and timing and potential results thereof and plans contingent thereon are forward-looking statements as defined in the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward looking statements are based on assumptions that are subject to significant known and unknown risks, uncertainties and other unpredictable factors, many of which are described in Zion’s periodic reports filed with the SEC and are beyond Zion’s control. These risks could cause Zion’s actual performance to differ materially from the results predicted by these forward-looking statements. Zion can give no assurance that the expectations reflected in these statements will prove to be correct and assumes no responsibility to update these statements.

If you practice Voo Doo you may stand a chance:Haarp VS Nature


Ask any western government official or geologist from the USGS if we can predict earthquakes, and they’ll say no. Well they are both right and wrong. Government and geologists will swear up and down that people can’t predict earthquakes (well actually that’s not quite true either) but biologists will tell you that animals can. Many animals can sense changes in Inaudible infra-wave sounds and electromagnetic pulses (EMP).

Predicting earthquakes-Knowldge is more dangerous then the earthquake.

The big secret is that scientists in Ukraine and Russia have known how to prediction earthquakes with fairly good proxy markers (ie excess radon gas above background levels , ionosphere disturbances etc) but governments around the world fears this new capability and the associated liability issues if they get it wrong or miss a large quake or don’t warn all people in time and can’t save them. (see model here)

Seismo Ionospheric Coupling Model

Maybe we should use animals in zoos across the country as not just a place of entertainment and destination for children’s’ outings, but as a network and early warning system for pending disasters.

If natural vibrations (the right resonance; like an opera singer shattering a crystal glass) and stress can produce EMP’s and earthquakes, then why can’t man-made sources do the same, as predicted and demonstrated by Nikola Tesla at the turn of the century? This principle can be used as stress relief to trigger mini-quakes on fault lines to prevent larger 7 or 8+ magnitude ones later

( …like triggering mountain avalanches or staging preventive forest fire burns or heaven forbid as offensive weapon of national destruction (WND) or weapon of mass destruction (WMD).

Some people speculate that DARPA’s HAARP project in Alaska surves that purpose…we’ll see if there just happens to be a “triggered earthquake” or some other natural disasters (weather modifications -drought, floods) in South Africa during the football World Cup in July 2010, or in Iran, Iraq, Pakistan, Russia or Afghanistan as some conspiracy theorists are proposing.

UPDATE: Post Haiti earthquake.

An interesting thought, cognitive exercise would be to ask yourself the following speculative, hypothetical question:

“Who would benefit if there was a man-made, triggered earthquake in South Africa, Iran, Iraq, Pakistan, Afghanistan, Venezuala or in the west coast of BC or Seattle during the Winter Olympics? Just look at who is benefiting from the Haiti quake (estimated at $10 billion to rebuild the Haiti capital city Port-Au-France) ) or from the Chineese quake recently and whose GDP will grow because of it? (Remember …both wars and disasters requires reconstruction which promotes GDP growth.”

A BEA/HAARP press release shows how much power can be triggered by HAARP:

In 1992, BAE was awarded a contract to design and build the Ionospheric Research Instrument (IRI), the HAARP program’s primary tool used to study ionospheric physics. The IRI is currently composed of 48 antenna elements and has a power capacity of 960,000 watts. When installed, the additional 132 transmitters will give HAARP a 3.6 mega-watt capacity. The HAARP build-out is jointly funded by the U.S. Air Force, the U. S. Navy and the Defense Advanced Research Projects Agency (DARPA).

Sensors could / should also be in place to detect EMP’s if they are produced naturally in the ground or from some remote artificial man-made source.

Wonder if anyone checked the Peurto Rico HAARP array to see if it was active before the Haiti earthquake ?

Here are two research paper abstracts from Japan that support the above “animal prediction” view


Walter Derzko

Reproduction of mimosa and clock anomalies before earthquakes Are they“Alice in the Wonderland Syndrome”? in Proceedings of the Japan Academy. Ser. B: Physical and Biological Sciences Vol.74 , No.4(1998)pp.60-64

Motoji IKEYA1), Tomonori MATSUDA1) and Chihiro YAMANAKA1)

1) Department of Earth and Space Science, Graduate School of Science, Osaka University

[Released: 2006/10/17]


Some earthquake precursor phenomena told as legends or reported retrospectively for the 1995 Kobe earthquake have been reproduced by laboratory experiments. Mimosa placed on the high voltage sphere of a Van de Graaff electrostatic generator closed its leaves and bowed on charging and air-gap discharging, presumably due to the current induced in its stem. Air-gap discharging caused sudden movements of eels in a nearby plastic aquarium. Eels moved also on applying a pulsed electric field of less than 0.5V/m, while catfish responded only at around 5V/m. The higher sensitivity of eels to electric field than that of catfish is consistent with the story in the Ansei Chronicle that a man could not find eels in a river but only catfish in violent movement before the earthquake. Eels might have already hidden themselves in panic. Rapid rotation and stopping of the second hand of a clock, which were observed before the Kobe Earthquake like in the“Alice in the Wonderland”, have also been reproduced by exposing clocks to electromagnetic waves generated by air-gap discharging. Reported malfunctioning of home electronic appliances before the earthquake would have been due to some natural electromagnetic disturbance at the epicenter.

Keywords: Catfish, clock, earthquake, Kobe, mimosa, precursor


Electromagnetic pulses generated by compression of granitic rocks and animal behavior

Compression experiments on granite, basalt and marbles were made using a 500-ton compression machine with simultaneous detection of acoustic emission, electromagnetic (EM) waves. Attempts were made to reproduce unusual animal behavior before major earthquakes depicted in folklores and reported retrospectively in the M7.2 Kobe earthquake in 1995. Unusual animal behavior was observed during stress loading with simultaneous detection of pulsed EM waves prior to the detection of AE, but the judgement has to be partially subjective when animal behavior is discussed.

Hence, hypothalamic chemicals in in-vivo brain and blood plasma of rats were analyzed before and after rock fractures. The enhanced noradrenaline and reduced adrenaline were observed, which was distinctively different from the reactions to other stresses but the same as that of exposures to EM waves. Unusual animal behavior would mostly be caused by pulsed EM waves.


Unusual animal behavior before earthquakes have long been studied in Asia (Abe, 1934; Biophysics Institute, 1977; Rikitake, 1976; Bushirk et al., 1981; Ikeya, 1998), but rarely believed by Western geophysicists. A large number of reports on unusual animal behavior before the Kobe earthquake in 1995, Japan, were collected retrospectively (Wadatsumi, 1995). Similar reports from citizens were collected after the Izmit earthquake in Turkey and 921-earthquake in Taiwan in 1999 (Ikeya and Ulusoy, 2000). The birds were said to have disappeared from the neighborhood a few days before the earthquakes and the sky was unusually starry in Turkey. Swarms of earthworms appeared and deep sea fish, Trachipterus ishikawae, called messenger of dragon palace and earthquake fish by Taiwanese people, were captured before the 921-earthquake and before its aftershocks.

I wonder if all the millions of spiritual people practising voodoo in Haiti, noticed any sudden changes in animal and bird behaviors just before the 7.0 earthquake hit Haiti last week…or what’s even more interesting..if they didn’t, does that prove that the quake was a man-made phenomenon?

Walter Derzko


Europe's Five Undeclared Nuclear Weapon States


According to a recent report, former NATO Secretary-General George Robertson confirmed that Turkey possesses 40-90 “Made in America” nuclear weapons at the Incirlik military base.(en.trend.az/)

Does this mean that Turkey is a nuclear power?

“Far from making Europe safer, and far from producing a less nuclear dependent Europe, [the policy] may well end up bringing more nuclear weapons into the European continent, and frustrating some of the attempts that are being made to get multilateral nuclear disarmament,” (Former NATO Secretary-General George Robertson quoted in Global Security, February 10, 2010)

“‘Is Italy capable of delivering a thermonuclear strike?…

Could the Belgians and the Dutch drop hydrogen bombs on enemy targets?…

Germany’s air force couldn’t possibly be training to deliver bombs 13 times more powerful than the one that destroyed Hiroshima, could it?…

Nuclear bombs are stored on air-force bases in Italy, Belgium, Germany and the Netherlands — and planes from each of those countries are capable of delivering them.” (“What to Do About Europe’s Secret Nukes.” Time Magazine, December 2, 2009)

The “Official” Nuclear Weapons States

Five countries, the US, UK, France, China and Russia are considered to be “nuclear weapons states” (NWS),

“an internationally recognized status conferred by the Nuclear Non-Proliferation Treaty (NPT)”.

Three other “Non NPT countries” (i.e. non-signatory states of the NPT) including India, Pakistan and North Korea, have recognized possessing nuclear weapons.

Israel – “Undeclared Nuclear State”
Israel is identified as an “undeclared nuclear state”. It produces and deploys nuclear warheads directed against military and civilian targets in the Middle East including Tehran.

There has been much hype, supported by scanty evidence, that Iran might at some future date become a nuclear weapons state. And, therefore, a pre-emptive defensive nuclear attack on Iran to annihilate its non-existent nuclear weapons program should be seriously contemplated “to make the World a safer place”. The mainstream media abounds with makeshift opinion on the Iran nuclear threat.

But what about the five European “undeclared nuclear states” including Belgium, Germany, Turkey, the Netherlands and Italy. Do they constitute a threat?

Belgium, Germany, The Netherlands, Italy and Turkey – “Undeclared Nuclear Weapons States”
While Iran’s nuclear weapons capabilities are unconfirmed, the nuclear weapons capabilities of these five countries including delivery procedures are formally acknowledged.

The US has supplied some 480 B61 thermonuclear bombs to five so-called “non-nuclear states”, including Belgium, Germany, Italy, the Netherlands and Turkey. Casually disregarded by the Vienna based UN Nuclear Watchdog (IAEA), the US has actively contributed to the proliferation of nuclear weapons in Western Europe.

As part of this European stockpiling, Turkey, which is a partner of the US-led coalition against Iran along with Israel, possesses some 90 thermonuclear B61 bunker buster bombs at the Incirlik nuclear air base. (National Resources Defense Council, Nuclear Weapons in Europe, February 2005)

By the recognized definition, these five countries are “undeclared nuclear weapons states”.

The stockpiling and deployment of tactical B61 in these five “non-nuclear states” are intended for targets in the Middle East. Moreover, in accordance with “NATO strike plans”, these thermonuclear B61 bunker buster bombs (stockpiled by the “non-nuclear States”) could be launched “against targets in Russia or countries in the Middle East such as Syria and Iran” ( quoted in National Resources Defense Council, Nuclear Weapons in Europe, February 2005)

Does this mean that Iran or Russia, which are potential targets of a nuclear attack originating from one or other of these five so-called non-nuclear states should contemplate defensive preemptive nuclear attacks against Germany, Italy, Belgium, the Netherlands and Turkey? The answer is no, by any stretch of the imagination.

While these “undeclared nuclear states” casually accuse Tehran of developing nuclear weapons, without documentary evidence, they themselves have capabilities of delivering nuclear warheads, which are targeted at Iran. To say that this is a clear case of “double standards” by the IAEA and the “international community” is a understatement.

The stockpiled weapons are B61 thermonuclear bombs. All the weapons are gravity bombs of the B61-3, -4, and -10 types 2.

Those estimates were based on private and public statements by a number of government sources and assumptions about the weapon storage capacity at each base

Germany – Nuclear Weapons Producer
Among the five “undeclared nuclear states”, “Germany remains the most heavily nuclearized country with three nuclear bases (two of which are fully operational) and may store as many as 150 [B61 bunker buster ] bombs” (Ibid). In accordance with “NATO strike plans” (mentioned above) these tactical nuclear weapons are also targeted at the Middle East.

While Germany is not categorized officially as a nuclear power, it produces nuclear warheads for the French Navy. It stockpiles nuclear warheads (made in America) and it has the capabilities of delivering nuclear weapons.

Moreover, The European Aeronautic Defense and Space Company – EADS, a Franco-German-Spanish joint venture, controlled by Deutsche Aerospace and the powerful Daimler Group is Europe’s second largest military producer, supplying .France’s M51 nuclear missile.

Germany imports and deploys nuclear weapons from the US. It also produces nuclear warheads which are exported to France. Yet it is classified as a non-nuclear state.


Eldorado Gold Receives Approval for Preliminary Environmental Impact Study at Perama Hill Project


VANCOUVER – BC – Paul N. Wright, President and Chief Executive Officer of Eldorado Gold Corporation (“Eldorado”, the “Company” or “We”), is pleased to announce that the Ministry of Environment, Energy and Climate Change of the Hellenic Republic of Greece (“Ministry”) has approved the Preliminary Environmental Impact Assessment (“PEIA”) Study for the Perama Hill Gold Deposit (“Perama Hill” or “Project”) located in Thrace, Northern Greece. The Project, with presently defined proven and probable reserves of 975,000 ounces of gold, will be developed as an open pit mine producing approximately 110,000 ounces annually at cash costs projected to be less than US$300 per ounce. Total invested capital will be approximately US$190 million. The Perama Hill Project is expected to provide employment for about 370 persons during construction and direct employment for 200 persons during operation, in addition to supporting significant levels of indirect employment in the area, characteristic of mining operations.

“We are pleased that the Greek Government endorses the Perama Hill project, which will provide positive signals for exploration and further development of the significant mineral resources in Northern Greece,” said Paul Wright, President and CEO of Eldorado Gold. “Eldorado has prepared the final Environmental Impact Assessment (EIA) Study, which will be submitted to the Ministry this quarter.”

Eldorado is a gold producing, exploration and development company actively growing businesses in Turkey, China, Brazil and Greece. With our international expertise in mining, finance and project development, together with highly skilled and dedicated staff, we believe that our company is well positioned to grow in value as we create and pursue new opportunities.


“Paul N. Wright”

Paul N. Wright
President and Chief Executive Officer

JORC Competent Person Statement
The information in this news release that relates to Perama reserves is based on information compiled by Richard Miller, P.Eng, who is a Member of the Association of Professional Engineers and Geoscientists of BC. Richard Miller is a full time employee of Eldorado Gold Corporation.

Richard Miller has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Richard Miller is the Qualified Person as defined in the Canadian National Instrument 43-101 (Standards of Disclosure for Mineral Projects) and consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

Certain of the statements made herein may contain forward-looking statements or information within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Often, but not always, forward-looking statements and forward-looking information can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements or information herein include, but are not limited, to statements or information with respect to the Perama Hill project.

Forward-looking statements and forward-looking information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. We have made certain assumptions about the forward-looking statements and information, including assumptions about the legal restrictions regarding the payment of dividends by the Company; assumptions about the price of gold; anticipated costs and expenditures; estimated production, mineral reserves and metallurgical recoveries; the impact of the integration of acquired businesses on our operation, financial position, reserves and resources and gold production; and the ability to achieve our goals. Although our management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking statements or information will prove to be accurate. Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. These risks, uncertainties and other factors include, among others, the following: gold price volatility; risks of not meeting production and cost targets; discrepancies between actual and estimated production, mineral reserves and resources and metallurgical recoveries; mining operational and development risk; litigation risks; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign investment and operating in foreign countries; currency fluctuations; speculative nature of gold exploration; global economic climate; dilution; share price volatility; the risk that the integration of acquired businesses taking longer than expected, the anticipated benefits of the integration may be less than estimated and the costs of acquisition higher than anticipated; ability to complete acquisitions; competition; loss of key employees; additional funding requirements; and defective title to mineral claims or property, as well as those factors discussed in the sections entitled “Forward-Looking Statements” and “Risk Factors” in the Company’s Annual Information Form & Form 40-F dated March 31, 2011, and in the Company’s Management Information Circular dated January 23, 2012, including the risk factors incorporated by reference in such circular.

There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, you should not place undue reliance on the forward-looking statements or information contained herein. Except as required by law, we do not expect to update forward-looking statements and information continually as conditions change and you are referred to the full discussion of the Company’s business contained in the Company’s reports filed with the securities regulatory authorities in Canada and the U.S.

Eldorado Gold Corporation’s Common Shares are listed on the Toronto Stock Exchange (TSX: ELD); New York Stock Exchange (NYSE: EGO). Eldorado CDIs trade on the Australian Securities Exchange (ASX: EAU)


Eldorado Gold Corporation
Nancy E. Woo, VP, Investor Relations
Phone: 604.601.6650 or 1.888.353.8166
Fax: 604.687.4026
Email: nancyw@eldoradogold.com

1188, 550 Burrard Street
Vancouver, BC V6C 2B5
Website: http://www.eldoradogold.com

Request for information packages: reception@eldoradogold.com

View News Release in PDF Format:

File: http://www.eldoradogold.com/i/pdf/12-07.pdf


Cheney, the Turks, and Nuclear Proliferation


The exposure of the Valerie Plame Wilson and her CIA non-official cover Brewster Jennings & Associates front company and her official cover Counter-Proliferation Division colleagues by neo-con elements in the Bush administration has taken a deeper turn down the rabbit hole of the CIA Leakgate scandal. While the neo-cons in Washington and Jerusalem continue to rattle sabers against Iran’s nuclear program and were responsible for the phony intelligence on Iraq’s non-existent nuclear program, the very same neo-con elements have not only turned a blind eye to Turkey’s acquisition of nuclear technology but have been involved in the proliferation of such technology to and through Turkey. The interest of Brewster Jennings and the CIA in Turkish nuclear smuggling activities potentially involved moving up the food chain and stinging individuals close to Vice President Dick Cheney, including Lewis “Scooter” Libby.

Turkey, a country that has been a nexus of nuclear technology and drug smuggling and a center of attention for Russian, Israeli, and Turkish criminal syndicates, NATO, the powerful American Turkish Council and its defense contractor sponsors, the Mossad, the Turkish Armed Forces and MIT intelligence agency, the Abdul Qadeer (AQ) Khan nuclear smuggling network, and financiers of the so-called “Al Qaeda,” has been intent on acquiring nuclear technology for many years with scant western media attention. In the last several months, Turkey has made a hasty decision to build a nuclear reactor at the Black Sea port of Sinop, ironically the location of a former National Security Agency listening station that monitored, among other things, nuclear developments in the USSR.

The most likely choice has emerged as Canadian CANDU (CANada Deuterium Uranium reactors manufactured by Atomic Energy of Canada Ltd.). The main concern about these style reactors is the ease with which they can produce tritium. Tritium can be used as the trigger catalyst for both fission and fusion nuclear bombs. India’s 1998 nuclear test was accomplished with tritium from CANDU reactors. More ominously, CANDU reactors are ideal for producing weapons grade plutonium.

On November 4, 1996, an auto accident on the Susurluk-Bursa highway in Turkey focused the attention of Turks on the close ties between the Turkish government and narcotics and weapons smugglers. Killed in the car were police officer Husein Kotzadag, a close aide to Home Affairs Minister Mehmet Agar, a former high police official. Also killed was his fellow passenger, Abdullah Tzatli, the chief of the right-wing fascist Grey Wolves. Injured in the accident was Sedat Butzak, a member of Parliament for the right-wing DYP (True Path Party).

Tzatli was involved in the escape of Mehmet Ali Agca from a Turkish prison. Agca then traveled to Rome where he attempted to assassinate Pope John Paul II in 1981. Although the assassination attempt on the Pope was blamed on the Soviet KGB and Bulgarian intelligence, the plot was a “false flag” operation designed to ratchet up tensions with the Soviet Union at a time when a group of former Democratic Cold Warriors, who once nested in Sen. Henry “Scoop” Jackson’s office, became arch anti-Soviet officials in the Reagan administration. Many of these same individuals would later serve in the George W. Bush administration where they were not only the architects of America’s failed invasion and occupation of Iraq but were also deeply involved in the nuclear and narcotics smuggling activities of Turkey’s devlin deret (deep state).

Tzatli was also wanted on a number of Interpol red notices (criminal arrest warrants). However, his Turkish diplomatic passport managed to get him out of prison in France and Switzerland.

The CIA itself assisted members of the Turkish “deep state.” The agency was implicated in allowing a Interpol wanted, drug smuggler and Turkish government hit man, Abdullah Catli, to “escape” from a Swiss prison. Catli was serving time for conviction of heroin smuggling. Catli’s influence permitted Mesut Yilmaz to become the ANAP-Motherland Party’s chief leader and later Prime Minister of Turkey through the use of Catli’s “support” network in the eastern Turkish border regions. These support networks were directly involved in the smuggling of drugs and other illegal cargo. Both Tansu Ciller, a later DYP Prime Minister, and Yilmaz openly defended accusations of their supporting smuggling as necessary to defend the Turkish State against terrorists (i.e. Kurdish resistance). However, this was merely a reason for the state to be involved in narcotics smuggling. Yilmaz was charged by the State Public Prosecutor with corruption during his tenure as prime minister. He was found innocent under by the Supreme Court in 2006 in a case that lacked transparency. Three months ago, Yilmaz announced he would return to politics.

Mesut Yilmaz is allegedly a key element of the drug trade and money laundering and its international dimensions. Yilmaz’s nephew, Mehmet Kutman, is the owner/founder of Global Menkul Degreler (Global Securities). According to experienced Istanbul bankers, “They [Global Securities] came from nowhere” and quickly amassed enough money to compete with the top echelons of Turkish banking and brokerage houses. Kutman, on a personal level, has made hundreds of millions of dollars from insider information passed on by his uncle’s political appointees in Ankara. In 1999, it was reported by the Cumhurriyet newspaper that he made 2.5 billion US dollars from advance information gleaned from IMF documents held by Ankara authorities and leaked to him by his uncle.

Global Securities is also reportedly a linchpin in transfer and laundering of the Turkish state illicit drug money. His blatant flouting of the law has earned Kutman a number of enemies in Turkey. A failed bomb attempt on his life last year was largely unreported by the media. Currently, the largest retail stock broker in Turkey, Global Securities is suspected of involvement in worldwide drug laundering activities.

The largest port in Turkey, Kusadasi, was refinanced in a deal through Global Securities that enabled the Romanian-born Israeli shipping billionaire Sami Ofer (owner of Zim Shipping) to acquire the largest stake. Later, Zim shipping tendered a bid to acquire and develop the largest port in Istanbul, Galataport. The Turkish Maritime Authority overturned Zim shipping’s winning bid when it learned that the Turkish government granted a hugely favorable financing scheme to Zim Shipping.

The Turkish government also secretly sold 15 percent of the state owned oil firm TUPRAS through Global Securities. Turkish courts overturned this sale after the Islamist AKP Party Prime Minister, Recep Tayyip Erdogan, admitted that he had being lying about a personal relationship with Zim after newspapers disclosed his travel tickets to the Far East with Ofer. Erdogan also equivocated about his meeting with Ofer’s son, Eyal, at the annual elitist gab fest at Davos, Switzerland. In fact, the relationship between the Islamist Erdogan and Ofer are so close, Ofer has publicly referred to Erdogan as the “second Mustafa Kemal Ataturk.” Ataturk is the revered founder of the modern Turkish state.

Recently, the Italian bank IMI (Banca IMI) purchased 90 percent of Global Securities. Banca IMI is reported to be involved in narcotics money laundering. Banca IMI also just purchased the American Bank of Albania in Kosovo. In May, IMI bought the Albanian-Italian Bank. Kosovo, a UN-run contrivance that is protected by the United States military, is a well-known distribution center for Turkish refined heroin from a current bumper crop of opium in American and NATO-occupied Afghanistan.

There has also been a recent rush by neo-con influenced media empires to acquire Turkish media enterprises. For example, Rupert Murdoch’s News Corporation recently purchased Turkey’s huge TGRT television network, while CanWest Global, which is owned by hard-line supporters of Israel’s Likud Party, purchased Turkish radio stations Super FM and Metro FM, with the help of Global Securities.

The Brewster Jennings & Associates/CIA interest in Turkey’s role in nuclear proliferation led to individuals with ties to Cheney’s office.

How does Israel figure into a government led by Turkish Islamists? Global Securities’ Mehmet Kutman introduced Prime Minister Erdoğan to Sami Ofer in order to gain political support for Zim’s bid for the Istanbul port. There is now a nuclear reactor suddenly announced by Erdogan to be built in Sinop. Along with the reactor, a huge port facility is to be announced for the city of only 250,000. Zim Shipping is bidding for the Sinop port construction. Some observers believe that Zim wants to be close to the Afghan opium trans-shipments to Europe through a modern port on the Black Sea.

Others say it is part of a Israeli-Turkish ploy to provide cover for the CANDU nuclear reactors and secretly extract weapons grade plutonium from the reactor. Global Securities’ Canadian co-owner is currently being investigated by the CRA (Canada Revenue Agency) for not reporting undisclosed assets—million dollar homes on the Aegean Sea and in the United States.

Bringing together an Islamist Party and Israel would, at first, appear to be an awkward alliance. However, there is a track record between Israel and Dubai, the financial center that helped transfer money from Pakistan to the 911 hijackers. When the Bush administration was hammering out a deal to allow Dubai Ports World to manage ports throughout the United States, there was a huge public outcry. However, support for Dubai Ports World soon came from an unusual source: Zim Shipping. The defense of Dubai Ports World, owned by the Dubai government, came despite the obvious prohibition of the UAE to do business with Israel pursuant to the Arab Boycott.

The US also arrested an South African Orthodox Jewish businessman named Asher Karni for selling nuclear parts to Pakistan via Dubai interlocutors. Karni’s friend, Zeki Bilmen of New Jersey-based Giza Technologies, a Turkish Jewish businessman, was also implicated in selling nuclear triggered spark caps to Pakistan. And one company suddenly moved out of the World Trade Center North Tower to Norfolk, Virginia with its 200 workers shortly before 9-11, in order to “save on rent” despite a decades long presence and forfeiture of a $50,000 lease guarantee. That company — Zim Shipping.

On June 13, 2006, WMR reported the following: The Turkish nexus of the Karni-Bilmen-Humayun [Khan]/A Q Khan smuggling network was of primary interest to both the CIA and FBI. It is also noteworthy that Judge [Thomas]Hogan, who dealt with the Karni case, was also the judge who ordered the FBI raid of Louisiana Democratic Representative William Jefferson’s congressional office. House Speaker Dennis Hastert, who has reportedly been under investigation for receiving Turkish campaign donations and his ties to [Jack] Abramoff, strongly condemned the FBI raid of Jefferson’s office. After Hastert’s protests, the Justice Department leaked word to the media that the Abramoff scandal extended to include Hastert. Essentially, Abramoff money was being used by the Justice Department as a weapon against Bush administration critics. WMR has also learned that Abramoff’s money was also used to blackmail other members of Congress who were investigating the Israeli connection to nuclear smuggling and the A Q Khan network.Source


SUMED,Transanatolia or both

Balkanalysis.com editor’s note: In Turkey, issues of public safety, disaster response and structural capabilities were brought to light again in the recent tragic earthquakes in the eastern Anatolian town of Van. However, these issues are also very relevant when it comes to maritime traffic in the heavily congested Bosporus and Dardenelles Straits. In the following detailed overview, Balkanalysis.com Energy Sector Editor Vlad Popovici discusses the problem and possible solutions to it, as well as the negative effect vessel congestion is having not only for safety and the environment, but for industry profit too.

When new restrictions concerning the nighttime vessel transit through the Turkish Straits were introduced by the Turkish authorities in late September 2011, a mini-crisis ensued. Because of transit delays apparently caused by the new regulations, the oil tanker rates in the Mediterranean soared and some shipping companies temporarily reduced their services in the region. This is just another crisis in a long list of similar recurrent events that point to an issue that is still looking for a long-term sustainable solution – the rapidly growing energy transit through the Straits that increases the environmental, public safety and economic risks for one of the busiest global shipping lanes. Although alternatives have been proposed, it looks like nothing will change for a while. But the clock is ticking.

A Strategic Location

The Black Sea’s only connection to the world’s oceans is through Turkey’s Bosporus Straits and the Sea of Marmara. The Black Sea is connected by the Bosporus – a 30 km strait, in places as narrow as 700 m – to the Sea of Marmara, which in turn is connected by the Dardanelles – almost 70 km long and as narrow as 1,200 m – to the Aegean Sea.

Istanbul, the most populous city in Turkey, straddles both sides of the Bosporus. The Turkish Straits are also considered the geographical border between Europe and Asia. Because of their strategic location, the Straits have historically been a critical trade route between Europe and Asia, but also the focal point for numerous conflicts since Antiquity.

The 1936 Montreux Convention Regarding the Regime of the Turkish Straits gave Turkey control over the Bosporus and the Dardanelles and guaranteed the free passage of civilian vessels during peacetime. The Convention remains in force today, although with amendments – for example, it was amended in 1982 to allow Turkey to close the Straits (in both peacetime and wartime). Subsequently, the Turkish authorities have adopted other regulations aimed at improving transit safety in the Straits, without touching the free passage principle of the Convention.

Restrictions in the Straits

At a time when the global shipping industry seems to be in the middle of a worse downturn than during the 2008 financial crisis, caused by an oversupply of vessels coupled with increased vessel operating costs and reduced global demand for goods as a consequence of the sluggish global economic growth, Energia.gr reported in mid-October 2011 that the tanker freight rates in the Mediterranean soared almost 30% in just one week.

The cause of the increased tanker freight rates was, according to a Platts report, the introduction by the Turkish secretariat for maritime affairs of new traffic regulations stipulating that vessels of over 200 meters carrying dangerous goods – including container and roll-on/roll-off ships – would only be allowed to pass through the Bosporus and the Dardanelles during daylight hours, which is when most crude tankers also travel through the straits.

The increased daylight traffic has caused average transit delays for oil tankers to go up from 1 day at the introduction of the new regulations in late September 2011 to 7 days two weeks later, delays that in turn caused the freight rates to soar.

Due to the traffic backlog created by the new rules, as well as to the strong pushback from the shipping industry and customers, the regulations were modified in mid-October to allow large vessels carrying certain dangerous goods to pass through the straits during the night in order to ease some of the congestion. As a result, the oil transit tanker delays dropped to 4-5 days and the tanker freight rates eased by as much as 16% only several days after the regulations’ reversal.

The mini-crisis in October 2011 is just another one in a long list of similar events that have either slowed down the Turkish Straits transit or completely shut it down. At about the same time that the above nighttime restrictions were announced, the Bosporus was closed to all transit passages during 28-29 September 2011 in order to carry out the largest emergency intervention exercise ever executed in the Turkish Straits, reported Turkish daily Hurriyet.

According to the exercise scenario, a 250-meter, 95,000-deadweight crude oil tanker collided with a passenger ship in the Bosporus and caused an oil spill. Going back in time, press reports talk about similar instances. For example, in the fall of 2002 other newly-introduced tanker transit regulations caused delays of up to three-and-a-half days.

The new procedures prohibited nighttime passage for ships more than 200 meters long and require vessels carrying dangerous cargoes – including crude and petroleum products – to request transit 48 hours in advance. Previously, night passage was only banned for ships longer than 250 meters and there was no requirement for advance notice. There was also a requirement for one-way only traffic while ships of 250-300 meters or vessels carrying liquefied natural gas or liquefied petroleum gas are passing through the Straits. The Straits can also be closed during periods of inclement weather, especially in winter, which can also cause significant delays and additional demurrage costs that run into $50-100,000 per day for an oil tanker.

All of these temporary or permanent restrictions are aimed at protecting the public safety and cultural heritage patrimony on the Straits’ shores and reducing the risks of major accidents in one of the most challenging maritime passageways in the world. In order to cope with the Turkish Straits’ many and abrupt course changes, narrow shipping lane, intense local cargo and passenger ferry cross-traffic (around 1,000 ferry crossings each day) the Turkish authorities have put in place an advanced Vessel Traffic Service that monitors and directs traffic through a radar network.

However, accidents continue to happen in the Straits – 141 since 2006 – and the risk of a major accident remains too high in the context of rapidly increasing transit traffic. The transit in the Turkish Straits increased ten-fold since the times of the Montreux Convention – in 2009, according to Turkish Coast Guard figures reported by SeaNews, over 50,000 ships, including more than 9,000 tankers, passed through the Bosporus.

An Energy Bottleneck

Increasing global trade has also dramatically increased the seaborne transportation of goods, creating at the same time several chokepoint or bottlenecks around the world. As a 2008 European Commission report notes, these chokepoints are narrow waterways used for transit of large volumes of international sea trade, including oil. The concerns related to chokepoints can be different: geopolitical in the case of transit through potentially unstable areas, security, in connection to possible terrorist attack, environmental, in particular in relation to damage from an accident, or economic if transit through a chokepoint requires long waiting times.

Both the above-mentioned Commission report and the February 2011 World Oil Transit Chokepoints report of the US Energy Information Administration (EIA) mentions the Turkish Straits (Bosporus and Dardanelles) as one of the global oil transit chokepoints, in the same category with other famous maritime transit bottlenecks such as the Strait of Hormuz, the Malacca Strait, the Suez Canal and the Danish Straits (connecting the Baltic Sea to the North Sea).

According to the EIA report, an estimated 2.5 million bbl/day (or 125 million tonnes/year) of crude oil transited through the Turkish Straits in 2009, in addition to another 0.4 million bbl/day (or 20 million tonnes/year) of oil products. This represents 3% of the annual global oil trade, compared to 18-20% that passes through the Strait of Hormuz.

Environmental and Public Safety Risks

Thousands of tankers transit the Turkish Straits annually, the vast majority of them headed southbound (from the Black Sea towards the Aegean Sea). The oil transit exponentially increased in the 1990s, when Russia began to open up new export markets for its oil, as well as export routes that bypass Ukraine, including mainly tanker exports through the Black Sea and Baltic Sea ports.

The increasing oil tanker transit creates significant environmental, public safety and economic risks for the city of Istanbul and the entire length of the shores of the Turkish Straits, as well as higher costs for the tanker owners and customers caused by transit restrictions during nighttime, weather and other factors.

The southbound crude oil transit from the Russian ports through the Turkish Straits peaked in 2004 at 3.1 million bbl/day (or 155 million tonnes/year), and has since decreased, in 2009 falling to the 2.5 million bbl/day (or 125 million tonnes/year) mark mentioned above. This was apparently caused by Black Sea Russian crude oil exports being shifted towards the Baltic port of Primorsk through the Baltic Pipeline System 1 that was inaugurated in 2001 and reached its 1.3 million bbl/day (or 65 million tonnes/year) capacity in 2006.

Oil tanker transit pressure in the Turkish Straits could further decrease in the near future, given that the 1-1.5 million bbl/day (or 50-75 million tonnes/year) Baltic Pipeline System 2 could be inaugurated during early 2012. The new pipeline will transport oil to the Baltic export terminal in Ust Luga, but will divert initially, according to press reports, only 100,000 bbl/day (or 5 million tonnes/year) of crude from the Black Sea export ports.

Indicators of a Future Increase in Maritime Transit

However, there are some drivers that could increase again both the southbound and northbound energy transit through the Turkish Straits during the next decade. Southbound, as Azerbaijan and Kazakhstan increase their oil production, the Black Sea and the Turkish Straits will be one of their export outlets to complement the Baku-Tbilisi-Ceyhan (BTC) pipeline.

For example, the Caspian Pipeline Consortium (CPC) carries Kazakh oil exports from the Tengiz oil field to the Russian port of Novorossiysk at the Black Sea. Earlier this year, Chevron officially launched its $5.4 billion project to double the capacity of the CPC oil route to 1.34 million bbl/day (or 67 million tonnes/year) by 2015.

Azerbaijan is also looking for alternative export routes for its natural gas, through pipelines or liquefied natural gas (LNG) exports from terminals on the east coast of the Black Sea. Although most of this LNG would be sent to re-gasification terminals in Ukraine, Romania or Bulgaria, some could find its way southbound through the Turkish Straits.

Bulgaria and Romania have also been in contact with LNG exporters outside the Black Sea, such as Qatar, to discuss potential LNG imports, which would create northbound LNG traffic through the Bosporus and the Dardanelles.

Finally, increased northbound crude oil transit is also possible, as some Black Sea countries are trying to shift their oil imports away from Russia – according to a recent online note by Ukrainian Journal, Ukraine will make a test-run shipment of Venezuelan crude through the Odessa-Brody pipeline to Belarus sometime in November 2011. The crude will definitely have to transit the Turkish Straits to get to the Black Sea port of Odessa. All these drivers point to a sustained and potentially increased oil and gas transit through the Turkish Straits for the foreseeable future.

Alternatives- Pipeline Projects

The Turkish authorities have expressed many times their concern regarding the significant risks created by the energy transit through the Bosporus and the Dardanelles and have taken, whenever possible, measures to increase the transit safety. Some alternatives, aimed at diverting a sizeable part of the energy transit from the Turkish Straits have been proposed.

Pipelines are a natural alternative to tanker transportation, especially over a relatively short distance and in regions with a challenging maritime navigation configuration, like the Turkish Straits. As discussed above, the Baltic Pipeline System 1 and 2 have already diverted part of the Russian crude transit through the Turkish Straits, but have only switched the problem to another oil bottleneck and environmentally-sensitive region – the Baltic Sea.

Several other Straits-bypassing pipeline routes have been promoted during the last decade. Two such projects would be built in Turkey. The Trans-Anatolia pipeline is a 560 km project that would carry 1-1.4 million bbl/day (50-70 million tonnes/year) of Russian crude from the Black Sea port of Samsun to the Mediterranean port of Ceyhan. Initially promoted by the Italian energy group ENI and the Turkish Calik Holding, the project got a boost in October 2009, when Russia signed a MoU with Italy and Turkey for the construction of the pipeline and the supply of crude that would involve the Russian companies Rosneft and Transneft.

However, as reported by the Energy in the Balkans – the Balkanalysis.com 2010 Annual Review, the discussions around the Samsun-Ceyhan pipeline project stalled in September 2010 and there have been no major progress news during 2011.

The other pipeline proposed to bypass the Bosporus and the Dardanelles through the Turkish territory, the Trans-Thrace project would transport up to 1.4 million bbl/day (70 million tonnes/year) of crude on a 280 km route from Saray on the Black Sea coast through the Marmara Sea port of Ambarli to Saros Bay at the Aegean Sea. This project, promoted by a Turkish oil and oil product storage and distribution company, has been dormant for several years now.

Two other pipeline projects are aimed at transporting Caspian crude oil to the European markets while bypassing the Turkish Straits. The AMBO pipeline (or Burgas-Vlore) oil pipeline project, would carry 0.75 million bbl/day (or 37.5 million tonnes/year) for 890 km, from the Bulgarian Black Sea coast through Macedonia to the Albanian port of Vlore.

The project is supported by the Bulgarian, Macedonian and Albanian governments, and though there were no major updates regarding the project in 2011, Platts notes in a recent interview with some of the AMBO promoters that the project team is currently focused on defining the financing sources in preparation for new crude oil export volumes expected to be shipped from the existing and new Caspian oilfields.

The Pan-European Oil Pipeline (PEOP) is the other pipeline project aimed at carrying Caspian oil to the European markets while also avoiding the Turkish Straits. The 1,856 km pipeline would carry 1.2-1.8 million bbl/day (or 60-90 million tonnes/year) of oil from the Romanian port of Constanţa at the Black Sea through Serbia and Croatia to the Italian port of Trieste.

Although the project has been supported by the European Union, it was postponed sine die in September 2009 as Croatia shifted its focus to other priority energy projects along the Adriatic Coast.

Finally, the only pipeline project aimed at bypassing the Turkish Straits that has moved forward during 2011 is the Trans-Balkan or Burgas-Alexandroupoli pipeline. The 279 km pipeline is mainly promoted by the Russian pipeline monopoly Transneft – with the Bulgarian and Greek governments as minority shareholders – and would carry 0.7 million bbl/day (35 million tonnes/year) of Russian crude from the Bulgarian Black Sea port of Burgas to the Greek port of Alexandroupoli at the Aegean Sea.

After three rejections, as noted by Novinite.com, Bulgaria’s Environment Ministry issued on 4 November 2011 a positive ruling on the Environmental Impact Assessment (EIA) documents submitted for the Trans-Balkan Pipeline. Although received with excitement in both Bulgaria and Greece, the decision is not a final approval for the construction of the pipeline, but instead allows the evaluation process to advance to the public consultation stage. The project has been slowed several times to the heated opposition of municipal leaders and citizens along the Black Sea coast, who fear that the presence of such a pipeline would destroy their livelihoods- the tourism industry. It is clear however that even this project will take years before becoming a real alternative to the oil tankers transiting the Turkish Straits.

A Turkish Canal?

Another interesting alternative for diverting part of the Turkish Straits traffic was presented early this year. As reported by SeaNews, at the end of April 2011 the Turkish Prime Minister Recep Tayyip Erdoğan presented for the first time the idea of a new shipping canal west of Istanbul that would take over part of the Bosporus traffic.

Although the exact location and costs have not been mentioned, the Istanbul Canal would be 45-50 km long, 150 m wide and 25 m deep, and would connect the Black Sea to the Marmara Sea. The tentative completion date that was announced is 2023 to coincide with the Republic of Turkey’s 100th anniversary.

It is still too early to make an assessment of the proposed canal project; however, it is clear that the costs and the engineering challenges will be huge. Initial public reactions noted by online sources express reservations about the huge project: the environmental impact of building a new canal, it is being argued, could nullify the positive impact of reducing Bosporus traffic; it could be difficult to divert traffic from the Bosporus – where there are no transit fees – to a canal that charges a transit fee; as the Turkish Straits are the only maritime outlet towards the world’s oceans of the Black Sea countries, all of them will have to be consulted on the new canal project; finally, the status of the new canal vis-à-vis the Montreux Convention will have to be clarified.

Is There a Definitive Solution?

The easiest way to assess the best options for diverting part of the Turkish Straits energy traffic may be to look at what has been done to ease the pressure on other global energy transit chokepoints.

In the Persian Gulf, the Abu Dhabi Crude Oil Pipeline (or Habshan-Fujeirah pipeline) was finalized in March 2011. The main objective of the 360 km long pipeline that crosses the United Arab Emirates is to move 1.5 million bbl/day (or 75 million tonnes/year) to the Gulf of Oman by avoiding the busy Strait of Hormuz. Although the pipeline’s current capacity is small compared to the 15.5 million bbl/day (or 775 million tonnes/year) of crude that transited the Strait of Hormuz in 2009, the new pipeline is a viable alternative to tanker transportation and its capacity can be increased in the future. The SUMED pipeline (or Suez-Mediterranean pipeline) runs for 320 km in Egypt from Ain Sukhna at the Red Sea to Sidi Kerir on the Mediterranean Sea, and its 2.3 million bbl/day (115 million tonnes/year) capacity provides an alternative to transiting the crude oil through the Suez Canal, especially appealing for vessels larger than the so-called Suezmax size (i.e. larger than 200,000 deadweight tonnes).

The SUMED oil transit alternative could become even more useful in the future, as the LNG traffic through the Suez Canal has increased from 430 tankers in 2008 to almost 800 in 2010, and is expected to grow significantly in the future as Oman and Qatar increase their LNG export capacity.

Finally, the Panama Canal, though a relatively minor energy transit bottleneck at the global scale (just 800,000 bbl/day (or 40 million tonnes/year) of oil and refined products transited the Canal in 2009) has a pipeline alternative as well. The Trans-Panama oil pipeline was built in 1982 and runs 130 km from the Atlantic to the Pacific with a maximum capacity of 600,000 bbl/day (or 30 million tonnes/year). Although the pipeline has in general been underused because of the relatively low oil transit volume it still provides a viable alternative to the Panama Canal tanker transit, especially for new Latin American oil producers, such as Colombia, that might wish to send their crude oil to be refined on the US Gulf of Mexico coast. All these examples show that pipelines can indeed be realistic alternatives to tanker transit.

Conclusion: A Problem Likely To Linger

As we have seen above, the Turkish Straits are and will probably remain one of the bottlenecks of the global energy trade, along other hot spots such as the Strait of Hormuz or the Malacca Strait, with the unfortunate distinction of being the only one that has a flourishing metropolis right on its shores – Istanbul – while being extremely narrow and treacherous to navigate.

Thus, the unique local realities of the Bosporus and the Dardanelles are creating a sense of urgency for easing the straits’ energy transit that is more acute than for the other global transit chokepoints.

However, though some alternatives for diverting some of the energy transit away from the Turkish Straits have been proposed and look feasible, it looks like for the time being, at least, the status quo is still the preferred option, with all the significant environmental, public safety and economic risks that it entails and the recurrent crises caused by increased traffic, bad weather or various temporary and permanent restrictions.

The Levantine Basin: High Stakes, Many Players

The Eastern Mediterranean has never been considered a promising hydrocarbon region, except for the Nile Delta area offshore Egypt. Moreover, most of the countries in the region, such as Cyprus, Lebanon and Israel have historically been heavily dependent on primary energy imports.

This story changed quickly, however, when huge offshore natural gas fields started to be discovered, one after another, offshore Israel and Cyprus, in what is called the Levantine Basin. Estimates show that the region could have oil and gas reserves that are comparable to the prolific oil and gas exporting Nile Delta region to the south.

The exploration and development of these reserves will be challenging not only from the technical and financial point of view, but because of the conflict-laden geopolitical landscape of the region. Although geographically distant from the Balkans, the new energy hot spot in the Levantine Basin already is already having an impact on the Southeast European countries.

Frontier Exploration in the Eastern Mediterranean

On 29 December 2010, Noble Energy, a US-based oil and gas company, announced a significant natural gas discovery at the Leviathan prospect in the Rachel exploration block about 130 km offshore the Israeli city of Haifa. Noble Energy has been leading since 1998 various exploration consortia in the offshore exclusive economic zone (EEZ) of Israel and started producing natural gas from the Mari-B field in 2004, the first offshore gas produced in the country.

The relatively small Mari-B field, with initial recoverable reserves of about 35 billion cubic meters (bcm) of gas, was followed in 2009 by the much larger Tamar discovery, with 255 bcm of natural gas reserves and the smaller Dalit field, with a bit more than 14 bcm of gas reserves. According to Noble Energy, Tamar was the world’s largest deepwater natural gas discovery in 2009.

Still, it was the Leviathan discovery, announced at the very end of 2010 that confirmed the discovery of a major new hydrocarbon production frontier. Noble Energy announced in December 2011, based on the appraisal work executed during the course of the year, that the Leviathan field has estimated recoverable reserves of 481 bcm. To put these discoveries into perspective, Tamar, Dalit and Leviathan have total gas reserves of 750 bcm, while Romania, the largest natural gas producer in the Balkans, currently has only 630 bcm of gas reserves!

Just before Leviathan was announced in December 2010, Israel and Cyprus signed an agreement delineating each country’s exclusive economic zone (EEZ) and their common maritime border. This agreement was necessary as the Leviathan field is located close to the agreed maritime border.

The Cyprus government had already awarded an exploration license to a consortium led again by Noble Energy for the 3,240 square km Block 12 in the Cyprus EEZ, bordering the Rachel block that includes the Leviathan field. At the end of summer 2011, the consortium started exploration drilling on the Cyprus A prospect in Block 12.

Very recently, on 28 December 2011, Noble Energy announced that the Cyprus A field has a reserve range of 142-228 bcm of natural gas, with a probable mean of 200 bcm. Moreover, the Cyprus government has also announced a second offshore exploration licensing round that is expected to be launched by early 2012. The Cyprus exploration moves have infuriated Turkey, because of the unsettled question of Northern Cyprus. As soon as the Cyprus A drilling started, Turkey sent a ship to carry out geological surveys off northern Cyprus and warned that any resources discovered in the Greek Cyprus EEZ belong to all Cypriots.

Balkanalysis.com originally reported on Cyprus’ plans for energy exploration back in 2007, when Turkey also responded in an aggressive manner. This fits a similar pattern of responses that goes back to 1987, when Greece and Turkey briefly went on a war footing over energy exploration plans in the Aegean, as an upcoming Balkanalysis.com review will discuss.

The Levantine Basin: High Stakes, Many Players

This is probably just the beginning of a wider regional push for offshore hydrocarbon exploration in the offshore geological region that is called the Levantine Basin.

Lebanon strongly opposed the exploration activities offshore Israel since the beginning, based on the lack of a maritime border agreement between the two countries. However, pragmatism prevailed and a 2012 offshore licensing round is now being prepared by the Lebanese government, with smaller independent oil and gas companies already expressing interest. Lebanon was also approached by the Cypriot government during fall 2011 to discuss their exclusive economic zones (EEZ) and common maritime border.

Syria, which has an EEZ that covers parts of the Levantine Basin, had announced an offshore licensing round in March 2011 as well, but put it on hold due to the internal political turmoil there.

The stakes are high: the Levantine Basin could contain yet-undiscovered technically recoverable reserves of 3.465 trillion cubic meters of gas and 1.7 billion barrels of oil. This could radically change the geopolitical landscape in the region and could provide the much-touted energy independence to countries, such as Cyprus and Israel which are heavily dependent on primary energy imports. Starting in November 2011, according to press reports, Israel started boosting naval patrols around the Tamar and Leviathan fields, replicating the security approach used for the Yam Thetys production facilities in the Mari-B field.

2012 will be a decisive year for proving that the Levantine Basin is a viable new hydrocarbon production region that can overcome the technical, financing and –most importantly – political challenges of producing hydrocarbons on a large scale.

Further exploration work in the region will hopefully improve the understanding of the real gas (and maybe oil) potential of this region. The gas resources discovered offshore Israel are more than the country can consume for the foreseeable future, and thus open the door to potential future exports; the same is the case for Cyprus, as the Block 12 exploration results have proven.

Consumption and Export Estimates, and LNG Terminal Options

Engineering and long lead time procurement is ongoing for Tamar, which is supposed to be commissioned by the end of 2012. The consortium partners have also started assessing production and export options for Leviathan, which should come online sometime around 2016-17. Even with increased gas consumption in Israel, between 5 and 10 bcm of gas would be available for export once all the major fields (Tamar, Dalit and Leviathan) are online.

As reported by press, Cyprus (where there is no natural gas market yet) would not consume more than 1 bcm of gas per year. Industry experts estimate that this would allow Cyprus to build an LNG export terminal with a capacity of 15 million tonnes of LNG per year (the equivalent of 20-21 bcm/year); the caveat is that building such a terminal would require almost a decade and would cost from 18-24 billion USD for an onshore LNG export terminal; therefore, a floating LNG terminal with a smaller capacity might turn out to be a better and cheaper option. The main gas export options from the region will be through floating LNG terminal(s), onshore LNG terminal(s), pipelines or a combination of LNG terminals and pipelines.

Pipeline export can give the exporter an advantage, since pipelines are usually built based on long-term export contracts, but are not flexible in case the exporter wants to diversify its customer base or the importer reduces the imported volume.

LNG terminals offer flexibility to the exporter in terms of the destination of the exports, but sometimes LNG exporters are forced to sell the gas on the spot market. Further, the above does not include any potential reserves yet to be found, not only in Israel and Cyprus, but also offshore Lebanon and Syria.

Turkey’s Role and Concerns

Turkey is one of the countries directly concerned by the offshore oil and gas potential in the Eastern Mediterranean. It is clear already that starting in around 2017 there will be significant natural gas volumes (5-25 bcm/year) available for export from the Levantine Basin. And, as exploration continues, the companies involved believe that there will be more gas and potentially oil discoveries in the same area. As the Leviathan gas field is very close to the Cyprus A field, a common export infrastructure might be developed for the two fields.

Turkey is very interested in natural gas, both as a customer and as a transit country to European markets. According to the BP Statistical Review of World Energy 2011, natural gas consumption in Turkey has rapidly increased from 14.6 bcm in 2000 to 39 bcm in 2010, most of it imported as the domestic production is still marginal.

In the future, gas consumption is expected to increase as more regions in Turkey are connected to natural gas distribution networks and new gas-fired power generation capacity continues to be installed in the country.

Most of the gas is currently imported by pipeline from Russia and Azerbaijan, but Turkey also has 2 LNG import terminals. On the transit side, virtually all of the various pipeline projects planned to move the Caspian natural gas to the European markets involve Turkey as a transit country – Nabucco, ITGI, TAP, SEEP, the Trans-Anatolian Pipeline newly announced by Azerbaijan’s SOCAR, even South Stream (its offshore portion would pass through the Turkish EEZ in the Black Sea).

In this context, Turkey cannot turn a blind eye to the Levantine Basin and its future gas export potential. As the combined European gas markets constitute the second global market in the world, due to the relative proximity of the Levantine Basin, it is clear that the developers of the region’s gas fields are looking at Europe as a primary target.

Current Consortium Preferences

At the present time the Leviathan consortium seems to prefer a liquefied natural gas (LNG) export solution. The main options currently being assessed are: a floating LNG export facility close to the fields; a pipeline to the Cyprus coast where a new LNG terminal would liquefy and export the gas; pipelines to either or both existing Egyptian LNG export terminals (Egyptian LNG and SEGAS LNG); a pipeline to a new LNG terminal on the Israeli coast where some of the gas would be liquefied and exported, the rest being sent by another new pipeline to the Israeli Red Sea coast, where a second new LNG terminal could export the gas to the Asian markets avoiding at the same time the transit through the Suez Canal.

Turkey, Israel and Cyprus: Cooperation Unlikely

In an ideal world, there would be another option, one that would have an impact on the Balkan region. The Levantine Basin gas could complement the Caspian Sea gas for some of the above-mentioned pipeline projects going to Europe.

In such a case, a relatively short offshore export pipeline (400-500 km) would be built from the Leviathan/Cyprus A fields to connect to the Turkish gas transmission network in Ceyhan, Mersin or the Antalya region and from there would be moved towards Western Turkey and Europe.

Politics makes the real world, unfortunately, far from ideal and the Eastern Mediterranean region even less so. Turkey’s relations with the government of the Cyprus Republic remain a powder keg over the Northern Cyprus issue. Moreover, the traditionally good relations between Turkey and Israel have soured since 2010 and the Gaza flotilla incident, and no one knows when and if they will get back to where they were. Under these circumstances, any gas export and transit cooperation scheme between Turkey, Cyprus and Israel seems highly unlikely.

Gauging Turkish Strategy

It will be interesting to follow Turkey’s strategy in this complex geopolitical context. The initial steps taken by the Turkish government were to vocally oppose the Cyprus/Israel common maritime border agreement in December 2010. Due to conflicting maritime claims and the Turkish Cyprus issue, Turkey has not concluded any EEZ or maritime border agreements with Greece and Cyprus).

A second tactic was the exploratory drilling in the Block 12 offshore Cyprus, saying that any exploration by Greek Cyprus violates the rights of the Turkish Cypriots. When the news about the start of the drilling in Block 12 broke in fall 2011, Turkey immediately deployed a geological survey ship, Piri Reis, to conduct offshore surveys in the waters north of Cyprus.

The next step for Turkey was to announce in November 2011 an exploration agreement of the national oil company TPAO with Shell that would cover areas offshore the southern province of Antalya, which is very close to the Levantine Basin. Press reports link this move to the drilling offshore Cyprus in the Block 12 and also quote a Turkish official stating that Turkey is moving its strategic focus from the Black Sea to the Mediterranean Sea.

It is clear that by these moves in the energy exploration sphere that Turkey has acknowledged the potential game-changing significance of the Levantine Basin hydrocarbons and wants to both understand the economically recoverable oil and gas resources of the region, and signal that it should not be left out of any hydrocarbon export scenario.

Seeking Self-Sufficiency: Cyprus and Israel

On the other hand, it is clear that Turkey cannot stop the development of the Levantine Basin hydrocarbon reserves. For Cyprus and Israel, having reliable natural gas domestic supplies is a vital issue, much more important even than creating a long-term gas export revenue stream. Cyprus is fully dependent on imports for its primary energy needs and on highly-polluting oil-based fuels, which are politically unacceptable according to the European Union climate-change policies. Moreover, its main power generation asset, the Vassilikos power plant, was badly damaged in the July 2011 catastrophic explosion at the nearby naval base.

Israel started developing its gas-fired power plant capacity with the commissioning of the Mari-B field in 2004. However, 40% of the country’s needs are already covered by gas imports coming from Egypt, and Israel’s consumption will more than double in the next 5-7 years, as the country is building new gas-fired power plants and is switching most of the existing ones from coal and oil fuels to natural gas.

Unfortunately, there is a risk that the Egyptian gas deliveries, coming through an onshore pipeline that crosses the northern Suez peninsula, could become less and less reliable in the future or could even stop; in less than ten months since the regime change in Egypt in February 2011, the pipeline has been attacked no less than ten times and subsequently shut down for days and even weeks. As seen above, both Cyprus and Israel have very strong incentives to develop the Levantine Basin hydrocarbon resources. Therefore, Turkey will be motivated to be involved in these developments, both as a potential customer, and – perhaps – as a transit country.

Greek Ambitions

Greece is the other Balkan country that is directly concerned by the Levantine Basin hydrocarbon discoveries, due to its desire to become a major energy transit link on the way to European markets and, not least, due to its cultural, political and economic links to Cyprus. As Balkanalysis.com reported in December 2011, the country has an extensive portfolio of energy exploration projects for the future, though its financial crisis has put a damper on these for now.

Greece’s domestic natural gas consumption is also steadily increasing- from 2 bcm in 2000 to 3.7 bcm in 2010 according to the BP Statistical Review of World Energy 2011, most of the gas being imported by pipeline and the Revithoussa LNG terminal.

Greece is involved in most of the gas pipeline projects mentioned above that are aimed at bringing Caspian (and potentially Middle East) natural gas to the European markets.

Greece also realized quickly the huge potential of the Levantine Basin, and therefore started discussions with Israel in early 2011 to explore opportunities for transiting Israel’s natural gas exports to Europe. Media sources have even started talking about a Cyprus-Israel-Greece energy triangle.

This is an interesting concept, but hardly feasible without some sort of participation or at least tacit agreement from Turkey. Beside the question of distributing the gas and the export revenues between Greek and Turkish Cyprus, a direct pipeline from Cyprus to Greece would have to be very long in order to avoid any Turkish territorial waters, or waters under conflicting claims. Turkey and Greece have no agreement on their long maritime border and have conflicting claims in many areas.

Such a pipeline would also be very expensive, as it would partially be installed in very deep waters (more than 2,000 m), at least until it reaches the shallower waters of the Dodecanese archipelago.

Although it is very difficult to estimate costs at this early stage, a Cyprus-Greece pipeline would probably be twice as long as the offshore portion of the South Stream gas pipeline in the Black Sea which would carry natural gas through deep waters as well, and which could cost 25-30 billion euros, according to industry estimates.

The other option would be to export LNG from the Levantine Basin to the Revithoussa LNG terminal in Greece. That currently has a capacity of a slightly more than 5 bcm/year, but these exports would only cover the import requirements of Greece, and potentially the import needs of some of the smaller Western Balkans countries neighboring Greece.

Therefore, mass re-exports from Revithoussa to further European markets would not make sense, as they would be more expensive than gas coming through one of the previously mentioned transit pipelines or by LNG in one of the Italian, French or Spanish terminals.

Treading Carefully

Greece has no choice but to tread carefully in its energy discussions with Cyprus and Israel so that Turkey does not feel excluded. Otherwise, Turkey could retaliate by delaying or blocking the existing pipeline project plans that include Greece, such as ITGI, TAP or even South Stream in favor of those that leave Greece out, such as Nabucco or the South-East European Pipeline (SEEP) recently proposed by BP.

One possible strategic approach for Greece and Cyprus would be to raise awareness in the European Union regarding the future gas exports from the Levantine Basin as a new supply source contributing to improving EU energy supply security, an objective much-touted by the Union.

The next step would be to get the EU to include on its priority gas projects (as part of the Southern Gas Corridor) a pipeline from the Leviathan/Cyprus A gas fields or from Cyprus to the Turkish coast, further feeding into the pipeline that will be chosen to carry the Caspian gas to Europe- Nabucco, or a reduced version of it, such as SEEP or the Trans-Anatolian Pipeline proposed by SOCAR.

This option would be cheaper than a direct Cyprus-Greece offshore pipeline and would ensure the cooperation of Turkey, while maintaining the viability of other projects in which Greece is interested, such as the TAP and ITGI pipelines. Such a pipeline would also develop a natural gas market in both Greek and Turkish Cyprus and would create value for Turkey through new gas imports and transit fees, hopefully contributing to a general improvement in the complex political relations in the region.

The European Union and the Levantine Basin: Strangely Quiet

The European Union has been strangely quiet on this major discovery, and the future of the Levantine Basin hydrocarbon resources, though it is very vocal about diversifying its gas imports away from Russia by strongly pushing the Southern Gas Corridor pipeline projects that would source their gas in the Caspian Region.

The problem is that the main gas pipeline project supported by the EU, the Nabucco pipeline, was planned – at 31 bcm/year capacity – around the assumption that gas would be supplied not only from Azerbaijan, but also from Turkmenistan and the Middle East (mostly Iraq, as Iran is not currently an option).

However, a closer look shows that the Nabucco project in its current configuration will not be economical, as it would work much under its design capacity. The main reasons are that Nabucco’s only probable source of gas at this point would be Shah Deniz II (not more than 10-15 bcm/year would be available for Europe starting in 2017).

Iraqi gas exports seem to be feasible only in a more distant future, while gas exports from Turkmenistan to Europe could be challenging, as a pipeline would have to carry it first across the Caspian Sea to Azerbaijan, and neither Russia or Iran have any interest in agreeing to such a project. As a reminder, the status of the Caspian Sea waters remains hotly debated, as it is not considered a sea from the international maritime law point of view and its riparian countries have conflicting views of how to share it. At present, it is much easier – politically and economically – for Turkmenistan to export gas to Iran, China or Russia.

These assumptions have been confirmed by recent events – such as BP and SOCAR proposing, in the fall of 2011, pipeline projects to Europe that would be smaller than Nabucco (10-16 bcm/year) and mainly supplied by the second stage of the Shah Deniz gas field in Azerbaijan.

Other Players at the Table

On the other hand, the gas fields in the Leviathan and Block 12 area could by commissioned by 2017, around the same time as Shah Deniz II. The estimated volume available for export from the Levantine Basin would be up to 25 bcm/year, based only on the fields that have already been discovered and appraised. This would complement Shah Deniz II nicely to fill the Nabucco pipeline at design capacity.

Otherwise, Nabucco, which continued too lose steam throughout 2011, could lose the race to be the first pipeline of the Southern Gas Corridor to be commissioned. As a side note, the other Balkan countries that are participating to the Nabucco project, Bulgaria and Romania, could benefit from the Levantine Basin gas being connected to Nabucco. This project is their main chance to benefit from the Southern Gas Corridor initiative, as most of the other projects proposed as part of the initiative, such as TAP or ITGI, would leave them out.

The EU should take a position with regards to the Levantine Basin gas as soon as possible, especially if the Union still considers Nabucco a viable project. As a next step, if interested in importing gas from the region, the EU should include any connected infrastructure projects on its priority energy project list, which would mean significant political and financial support for the development of the Levantine Basin resources.

Otherwise, EU countries will probably have to buy the Levantine Basin gas as liquefied natural gas on the spot market – usually, priced higher than pipeline gas – or see it all go as LNG to the markets in Asia. The clock is ticking, as the Block 12 exploration advances and the Leviathan consortium will select the best development option by end March 2012 [PDF].

At a regional level, most if not all of the Balkan countries have a vested interest in seeing the Levantine Basin gas flowing through one of the Southern Gas Corridor pipelines, as this would diversify their gas imports and bring some of them transit revenues: Nabucco and SEEP for Turkey, Bulgaria and Romania, ITGI for Turkey and Greece, TAP for Greece and Albania.

The year 2012 could prove to be a decisive year for the future of the Levantine Basin hydrocarbon resources. In a last twist that only highlights the complexity of this Mediterranean hydrocarbon saga, media reported in October 2011 that Russia is interested in exploration and development licenses in the Levantine Basin, and that it supports Greek Cyprus in its exploration approach.

Moreover, Russia in November 2011 sent an aircraft carrier to the Eastern Mediterranean region for joint naval exercises with Israel, close to the Leviathan gas field, and it intends to develop the Tartus maintenance and supply base it has been leasing from Syria since 1971 to serve as a base for guided-missile cruisers and even aircraft carriers Source

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