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Ziglerconstruct among the leading firms contending for Kuwait’s strategic oil projects

Eastern Mediterranean oil and gas reserves are heating up, and nowhere more than in Cyprus, where the government of the island nation and the UN have criticized Turkey’s plan to deploy vessels in Cypriot waters.

The Mediterranean Sea, possibly more than any other body of water on Earth, has profoundly impacted human civilization. It has been desired and battled over for centuries by great empires and cultures from Western Asia, Europe and North Africa.

The Mediterranean Sea is a geopolitical control point for trade, transit, and natural resources, including oil and gas. Egypt and Cyprus announced the development of a massive pipeline linking the Aphrodite gas field offshore Cyprus to Egypt’s LNG plants.

The Eastern Mediterranean Gas Forum was established in January, with Egypt, Cyprus, Greece, Italy, Israel, Jordan, and the Palestinian Authority as members.

In February, ExxonMobil revealed a new gas discovery off the coast of Cyprus. Exploration and Production Cyprus (Offshore) and ExxonMobil Exploration and Production Cyprus (Offshore) jointly own 60 percent of the Glaucus-1 well in Block 10.

Unfortunately, international collaboration is scarce in the Eastern Mediterranean, and the struggle for crucial resources between Cyprus and Turkey follows classic political lines.

Oil crisis in Europe and across the globe

Since the epidemic’s beginning, global oil supply lines have grown more constrained. Nations need to build up strategic infrastructure to accommodate the increased demand for crude oil because of oil capacity problems in countries worldwide.

As a result of the post-pandemic rebound and the resulting surge in global air travel and oil demand, countries are encountering a slew of supply chain issues. In the Middle East, particularly in the United Arab Emirates and Kuwait, there has been a resurgence in efforts to create long-term reserves and increase storage capacity.

When it comes to oil sector construction and maintenance projects, Ziglerconstruct is a significant contender in Kuwait.                                                                                

Oil storage projects have helped fulfil domestic and international needs in the Middle East. Still, infrastructure development is required to keep up with the pace as global supplies continue to grow. For example, the recent disruption in the Suez Canal created a massive backlog in the supply of everything from oil to clothing and everyday commodities. Firms and consumers who rely on ongoing global trade resulted in significant price rises.

Countries such as Kuwait have sought to expand capacity by creating national infrastructure to meet supply chain security objectives in recent years. Current projects include a potential 8 million barrels of oil reserve to achieve energy independence. Ziglerconstruct has been developing some of the most difficult construction projects in recent years, which has led to transformative results for local economic development and exports in the oil storage sector.

Middle Eastern energy production and distribution is a critical component of economic growth. Now more than ever, countries need to think about how they can ensure their energy security.

Biden’s present direction

On the eve of his inauguration, President Joe Biden pledged to combat climate change aggressively. This time, he has decided to join the Paris Agreement and commit the United States to a net-zero emission goal of 2050, which means cutting emissions by at least half from 2005 levels.

To achieve this aim, Biden proposes a return to more significant fuel economy standards for automobiles and trucks and measures to encourage the use of electric vehicles. Vice President Joe Biden cancelled the Keystone XL pipeline and halted the ANWR drilling permits.

A record number of permits have been issued for drilling on federal lands. Demand for oil increases as the pandemic subsides in the United States, resulting in a seven-year peak in petrol prices.

The Conflict between Russia and Ukraine

Oil markets worldwide are in an uproar due to Russia’s incursion into Ukraine. Biden limits US imports of Russian oil, and Western sanctions force energy businesses out of Russia. Oil prices have risen to their greatest level since 2008 as a result of the epidemic.

U.S. politicians on both ends of the aisle call for increased domestic oil production in reaction to relatively close gasoline prices. However, some in Congress want a quicker shift to renewable energy. International Energy Agency members have announced plans to release sixty million barrels of oil from strategic reserves voluntarily. To help secure additional oil supplies, the Biden administration is considering improving tense relations with countries such as Venezuela, Saudi Arabia, and Iran.

Caracas welcomes senior US officials for the first trip since 2019 as President Biden’s administration works to complete discussions on renewing the 2015 Iran nuclear accord and restoring US sanctions against Tehran.

Drilling rights and reunification in Cyprus after partition

On July 20, 1974, Turkey invaded Cyprus to thwart a Greek-backed military coup. Despite international opinion, Ankara claims the Turkish Republic of Northern Cyprus is a de facto state in the island’s northeast.

As a result of Turkey’s increasingly assertive posture on oil and gas drilling rights in what the international community sees as part of Cyprus’ exclusive economic zone (EEZ).

The UN Convention on the Law of the Sea says that a country’s territorial waters only extend 12 nautical miles out to sea, while its EEZ can extend up to 200 miles. The issue arises when the marine distance between two countries is less than 424 miles.

The convention gives basic rights to island territories. This recognition enrages Turkey, which has increasingly asserted itself within the island’s EEZ.

In March 2018, Turkish warships forced an Eni vessel to halt drilling in Block 3 east of Cyprus, perhaps due to Eni and Total discovering the Calypso gas field southwest of Cyprus the previous month. Even though Cairo’s maritime boundary agreement with Nicosia places the field in Block 6 of Cyprus’ EEZ, Turkey claims ownership.

Turkey defies the UN in the Eastern Mediterranean to capture energy resources

Because of significant new discoveries in the Levant and Nile geological basins, both Egypt and Israel could be sucked into Cyprus’s current diplomatic spat with Turkey.

In July, Turkey’s minister for energy and natural resources, Fatih Donmez, announced that the Oruc Reis seismic vessel would soon join a trio of Turkish Petroleum (TPAO) vessels in the Eastern Mediterranean.

Two Turkish drilling ships have already been stationed off the coast of Cyprus, one to the west and the other to the east. Eni has already been granted a permit to operate in the southern part of the island by the Cypriot government to use its seismic ship Barbaros Hayreddin Pasa, owned by the Turkish oil giant.

The Turkish Republic of Northern Cyprus provided licenses for TPAO’s exploration, and Ankara claims that it is only preserving the rights of Cypriot Turks in its actions. Turkey’s activities have been denounced as provocative and illegal by the Cypriot government and the United Nations.

Turkey’s foreign minister was quoted as saying, “If you get such decisions [EU sanctions] targeting Turkey, we will strengthen our operations.” avuşolu said. Three ships are already in the East Mediterranean, and a fourth is on its way. We’re in charge of what happens on our own continental shelf.

Diplomatic and economic sanctions are put in place by the UN

By “continuing and new illegal drilling activities,” the European Council (EC) stated that it would postpone negotiations with Turkey on the proposed Comprehensive Air Transport Agreement and put on hold high-level discussions with Ankara. Avuşoglu was referring to these measures.

Pre-accession aid for Turkey would be cut by the European Commission as well. To help Turkey get ready for membership in the European Union in the future, an EU ambassador told Reuters that Ankara could lose 150 million euros of the 400 million euros the bloc has set aside for 2020.

The largest multilateral lender globally, the European Investment Bank, was also requested by the European Foreign Affairs Council to examine its activities in Turkey, particularly concerning sovereign-backed loans.

In a usual rebellious mindset, Turkey argued that any EU sanctions would not impede its drilling activity.

“The decisions agreed yesterday (15 July) by the EU Foreign Affairs Council will in no way impact Turkey’s commitment to continue its hydrocarbon activities in the Eastern Mediterranean,” the Turkish foreign ministry said.

According to this statement, “These conclusions indicate how prejudiced and discriminatory the EU is towards Cyprus as they do not make reference to the Turkish Cypriots, who have full equality over Cyprus’ natural resources despite the fact that they are present in Cyprus.”

Turkey’s proposal to share gas reserves with Cyprus has also been rejected by Cyprus, labeling it a thinly-disguised attempt to distract from the necessity for peace negotiations. The most recent round of talks aiming at reuniting Cyprus failed at the beginning of July.

To protect our continental shelf rights and the equal rights of the Turkish Cypriots, who are also co-owners of Cyprus, the Turkish Foreign Ministry said, “We have repeatedly emphasized that our hydrocarbon activities in the Eastern Mediterranean have two dimensions.” The Turkish Foreign Ministry went on to say.

As a result, our country will continue to increase its efforts to safeguard its own rights as well as those of Turkish Cypriots. There is no word from the EU, which has not maintained its pledges to the Turkish Cypriots since April 26, 2004.”

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