Giorgos Adalis: What pitfalls does the acquisition of Noble by Chevron hide for Greece and Cyprus?

For two years we have been analyzing the largest rearrangement in the energy sector that the planet has experienced. The recent acquisition of Noble Energy by Chevron exploded like a bomb in Cyprus. The political staff said they were surprised but tried to reassure Hellenism. While they should expect it, they fail to see that the change of ownership hides pitfalls and changes in plots. But what really happened to Noble and who are the key people at Chevron?

American firm Noble Energy is the first company to invest in Cypriot plots and received the concession for plot 12, in 2008. Later, in August 2011, Noble signed an agreement with Nicosia for the commercial development of the plot and the drilling started in September. The Cyprus-Noble agreement was the fruit of the policy of Tassos Papadopoulos, who had chosen it. In my estimation, the main reasons were two:

• First, because Noble was then the pride of the US energy market and was considered a rising force.
• Secondly, because Chuck Davidson was at the helm of Noble. An American market veteran of Jewish descent and a member of the American Jewish Committee.

The success of the Papadopoulos-Davidson duo was evident from the rapid installation of Noble in Israel and Cyprus. But it became even more apparent in the policy pursued by the Turks, who, while “barking” about the drillings and threatening, never dared to take a threatening action on the Noble plots.

The deal to rescue Noble

Noble withstood the energy market crash that began in 2014. But it could not withstand the oil price war and the impact of the coronavirus, so it found itself on the mat. The company, strategically, had direct relations with the Israeli lobby in the USA as well as with Netanyahu, while executives of Jewish origin were always in its leading positions.

Chevron, taking advantage of Noble’s plight, proposed the following deal: To save Noble, Chevron offered a $ 5 billion package and in addition would repurchase its debts, raising the total package to $ 13 billion, offering $ 10.38 per share and Noble shareholders will receive 0.1191 shares of Chevron for every Noble share they held on July 17.

The deal caused a stir, but not for Erdogan, who knows people and things inside Chevron. In addition to assets on the American continent, Chevron has finally acquired a presence in the Mediterranean. It now owns the Leviathan field in Israel with recoverable reserves of 22 trillion. cubic feet of natural gas, but also the “Tamar” field with 7.1 trillion. cubic feet. As the administrator, it also acquired plot 12 (“Aphrodite”) in Cyprus, which is estimated to have reserves of 4.5 trillion. cubic feet. And that is why it concerns us.

The acquisition will be completed in the fourth quarter of the year, after the offer is accepted by Noble shareholders, and after the US federal authorities approve the acquisition. At the same time, the Cypriot government should accept Chevron in place of Noble. This development may hide pitfalls for Greece and Cyprus. To explain this we need to talk about Chevron and the people who run it.

Chevron’s major shareholders

Chevron was founded by John Rockefeller and is 141 years old. It was the 11th of the 500 largest companies on the planet and is divided into two levels. The upstream that deals with the exploration and production of hydrocarbons, and the downstream that includes refining, transportation and marketing. It has a presence in 180 countries.

Chevron’s three private major shareholders have also held senior management positions for decades. The eldest named John Watson has been in the executive position since 1980 and went on to be the CEO and president of the company until 2018. Although he financed the campaigns of Republicans rather than Democrats, he was also a member of the Board of the Federal Petroleum Committees and maintained a relatively neutral stance toward Trump. He did not help him but did not fight him openly. The same tactic is followed by Watson’s successor, Michael Wirth, who has been running Chevron since 2018. He was in charge of the Asia, Middle East and Africa department and knows the eastern Mediterranean region very well.

The second major shareholder of Chevron is named Robert Dennam. Apart from being a partner of a large law firm, he is also a member of the Oaktree Capital Group, but also a member of the Board of Directors of the New York Times. He has access to the entire US media system and is, of course, a sworn enemy of Trump, after the newspaper went so far as to headline “Donald Trump will be the disaster of America.” However, he saw the transformation of Hagia Sophia into a mosque in a positive light!

Chevron’s third largest shareholder is our main issue. This is Ronald Sugar. A 70-year-old Canadian who does not come from the hard core of the oil market, but from the world of technology. He is a member of the Board. giants like Apple and politically owned by Republicans, but his relationship with Trump is bad.

Few people know that from 2003 to 2010, Sugar was the CEO of aircraft manufacturer Northrop Grumman. It is the co-producer, along with Lockheed Martin, of the F-35 aircraft. Sugar has the phones of Erdogan, his two sons and four Turkish ministers on his cell phone. The reasons can be imagined. The F-35, in which Turkey was also a co-producer, was the scene of fierce controversy between Trump and the manufacturers, even during the pre-election period.

Regarding the funds and large organizations that invest in Chevron, it is worth noting that on 28/7/2020 they owned a total of 35.46% of the shares. Shortly before the announcement of the acquisition of Noble, German companies rushed to invest in Chevron. A typical example is the German Assenagon Asset Management, which bought 503,000 shares of Chevron in just one day! The Dutch Mn Services is also followed suit. Although it prefers to invest in IT stocks, it bought 624,000 Chevron stocks on the same day. In contrast, purely US funds, such as First Trust Advisors, sold packages of 1.2 million shares.

Chevron management “favors” Turkey

In summary, Noble, which “fixed” the oil exploration business in Cyprus and Israel, which promoted Eastmed and which pushed for the Greek-Cyprus-Israel cooperation, has ceased to exist. In Chevron, the Israeli lobby does not seem to have serious penetration. Noble’s geopolitical orientation in the Mediterranean is therefore in jeopardy with Chevron. In particular, Sugar seeks to reinstate Turkey in the F-35 program.

In addition, the New York Times has not only said well done to Turkey for its intervention in Libya and for the illegal Turkish-Libyan memorandum. In addition, Chevron has been working with Turkish Petroleum in the Black Sea for years. Its old rival, ExxonMobil in the plots of land in Iraq, give it a first class opportunity to fully expand in the Mediterranean, buying Exxon shares in Greece and Cyprus!

This raises the question: Who is more interested in replacing Noble with Chevron at this stage? Greece or Turkey? While all this is happening, the presence of the American aircraft carrier “Dwight D. Eisenhower” (CVN69) in Crete is not just a coincidence. You see, the players have learned their lessons, since Erdogan drove the Italian EMI drilling rig with his frigates, at a time when there was a caretaker government in Italy unable to react.

Americans know that Erdogan takes advantage of such transitional periods. Given this, the only sure thing is that in our region, the replacement of Noble by Chevron is going to bring about reshuffles both strategically and politically. And if our eyes are not wide open, I am afraid that change will be in favor of the Turks.