"While the South China Sea disputes rival with the Middle East events to hit the world media radar screen, the Mediterranean is emerging as home to some of the world’s richest deposits of energy. The sea-shore resources found are fabulous and the competition for drilling rights is launching a new impulse for tensions or the need for new policies.
On March 30, 2013 Israel began pumping its first offshore natural gas to boost economic growth and transform the country’s energy security in coming years. The Tamar Gas Field is the largest privately funded infrastructure project in Israeli history. Situated about 90 km off the coast of Haifa in northern Israel, it began to flow via pipeline to an onshore terminal at Ashdod in southern Israel. Prime Minister Benjamin Netanyahu said, «We are taking an important step toward energy independence.» Discovered in 2009 (around 90 kilometers west of Haifa), it holds an estimated 8.5 trillion cubic feet of natural gas. There is also a larger, but still undeveloped, Leviathan, which boasts an estimated 16 to 18 trillion cubic feet of gas. The field is expected to go online in 2016, the time export sales are to start. Leviathan would hold enough reserves to supply Israel's gas needs for 100 years. The companies are studying options, including exporting liquefied natural gas, or export via a pipeline, to Jordan or Turkey. Russian energy state company Gazprom has shown interest in working with the consortium drilling off Israel’s coast.
The discoveries are just a portion of the huge reserves in the Levant Basin, which the United States Geological Survey estimated in 2010 holds some 122 trillion cubic feet of recoverable natural gas. Huge underwater gas deposits have been recently discovered between Cyprus and Israel, who are to develop them jointly. They have become close allies.
The recent discoveries of enormous oil and gas reserves in the little-explored Mediterranean Sea between Greece, Turkey, Cyprus, Israel, Syria and Lebanon suggest that the region could become literally a «new Persian Gulf». But there is a reverse side of the medal. New battles over rights to resources in the Levant Basin and Aegean Sea could spark tensions and military conflicts. Turkey insists the gas must be shared, it has sent ships to back its stance. Syria and Lebanon have their own claims. Palestine, Egypt, Lebanon and Syria are also advancing claims to the "Aphrodite" gas field off Cyprus…
Israel: hard choices
Before the finding, Israel was in a pretty fix. The Arab Spring toppled Mubarak, under whose regime Egypt had supplied some 40 per cent of Israeli natural gas. The gas pipeline from Egypt became the target of sabotage and disruptions. Now Israel is facing new challenges navigating the geopolitical quagmire. It still has not formulated an export policy and, probably, subsequent security arrangements.
Cooperating with Cyprus risks antagonizing Turkey. The neighboring Egypt and Jordan might provide opportunity, but there is some political risk. Europe is a potentially larger and more stable market, but reaching the continent is a logistical challenge. The most obvious route to Europe would be through Cyprus, then to Turkey. Cyprus fears that in case the alliance is renewed, Israel may instead opt to pipe its excess gas to Turkey directly to reach European markets. It would open the door to co-operation with Turkey, a large market and rising player on the global stage. A pipeline to Greece, connecting with Europe’s distribution system, would be longer, costlier and riskier. The demand in Europe is falling pulling prices lower. Exporting liquefied natural gas (LNG) to markets, where prices are high, would be an option. But it requires huge investments and a big coastal site. Israeli gas could be liquefied in Cyprus, but that would mean Israel ceding control. A floating LNG vessel, moored at the field, has also been mooted. The technology is new and, as yet, untested. Such a vessel would also be vulnerable to terrorism.
The maritime border between Lebanon and Israel is disputed. The Lebanese Shi’ite militant group Hezbollah poses a formidable threat. Last year it sent a drone deep into Israel, covering more than enough of the distance needed to reach some of the gas fields. The group, backed by Israel’s enemy Iran, also says its rocket arsenal has the range to hit anywhere in Israel, which indicates more sophisticated technology.
The Gaza Strip is ruled by the Palestinian Islamist group Hamas, which has fired thousands of rockets into southern Israel. The platforms are within their range.
Actually the gas rigs are potentially vulnerable to attacks from the plethora of militant groups in Egypt, the Gaza Strip and Lebanon. Sending gas to a processing plant in Egypt is an iffy undertaking because the peace agreement between Israel and Egypt is tenuous. There have already been at least a dozen pipeline attacks by militants in Egypt’s Sinai desert.
Still there also some opportunities at hand. Israel now has a stable source of energy to strengthen relationship with its neighbors, for instance it can provide energy to Jordan and Palestine. Jordan has also seen its gas supplies disrupted by the pipeline attacks in Egypt, it has to use oil to make electric plants run. So the country badly needs a stable source of energy. A peace agreement was signed between Jordan and Israel in 1994. A new impetus to commercial activities would help cement the peace.
A terrorist attack is dramatic with dire economic ramifications. It would hike the insurance rates to heights which would call into question the very feasibility of undertaking the project. It would undermine the will of foreign companies to do business in the area. The array of possible threats is impressive: boat bombs, drones, submarine vessels, rockets and missiles. The navy has adopted a theatre-wide defense, which entails the combining of intelligence, control, reconnaissance and physical presence. The service seeks to acquire four offshore patrol vessels that would serve as the backbone for the maritime defense strategy. The cost is $3 billion and it takes time to put them into operation. The construction will take over four years. The vessels are going to be cutting-edge platforms armed with the famous Iron Dome, Barak anti-ship missiles, the Vulcan Phalanx CIWS, a helicopter and other up-to-date systems.
Along with tasking the navy, Israel applies efforts to involve other countries into security arrangements. It would be propitious to remember that Greece and Israel signed a defense pact in September 2011. Although the terms of the Israeli-Greek mutual defence pact are not public, it is believed to include the protection of Cyprus’ military infrastructure. This provision may be regarded as an element of a more extended defense structure. Another is the cooperation agreement between the Greek and Israeli air forces, which have engaged in planning and exercises. These are the steps to build a solid basis. Israel, Cyprus and Greece have been holding intensive talks in recent months at the prime ministers’, ministerial, and chiefs-of-staff levels on offshore gas projects and regional security.
In March 2013 Israeli, Greek and US warships began a joint two-week Mediterranean naval exercise codenamed "Noble Dina". For several years, Israel and the US had carried out naval manoeuvres with Turkey, but in September 2011 Ankara suspended military cooperation with the Jewish state. Now the events have other participants. Obviously the Noble Dina's exercise is designed in part to practice defending offshore gas rigs. In November last year Israeli and US troops concluded a major missile defence exercise lasting more than three weeks and involving 3,500 personnel from the US European Command and 1,000 Israeli troops.
Other actors
Turkey is dependent on imports for 91 per cent of its oil and 98 per cent of its natural gas. It disputes Cyprus’s rights to develop its Exclusive Economic Zone (offshore rights up to 200 nautical miles). The country is not a party to the Law of the Sea treaty. Turkey claims the Turkish Republic of Northern Cyprus, a state unrecognized internationally, is entitled to a share of the riches. At the same time, it is the only country in the world that doesn’t recognize the state of Cyprus, an EU member. The Cyprus plans to start gas extraction are seen as a hostile action. Turkey has deployed war ships and jet fighters to the area, and engages in retaliatory gas exploration off the south coast of Cyprus. In March this year it suspended projects started with Eni over the participation of the Italian oil group in an exploration project of gas reserves off Cyprus, which Ankara opposes in a dispute on territorial waters. Greece is a party to the Law of the Sea but it never claimed an Exclusive Economic Zone in the Mediterranean because of Turkey’s threats to start war if it did.
As diplomatic relations between Israel and Turkey have started to thaw recently, Taner Yildiz, the Turkish energy minister, said his country would be open to the construction of a pipeline to distribute Israel’s newly discovered gas. According to him, a pipeline project between the two countries is a possibility. Ankara is keen to become an energy hub for the region. The announcement follows the above mentioned Israel’s apology to Turkey. Still, the difference on the Palestinian issue is emphasized while the gas prospects are tackled. At the same time, the both countries have important mutual interests, along with energy. They both have borders with Syria and oppose the Syrian incumbent government. Also, the both are allies of the United States, and Washington is strongly pushing for rapprochement. Will economic pragmatism prevail, or geopolitical considerations will make Turkey a spoiler, remains to be seen.
Lebanon. The discovery of Leviathan by Israel in the waters offshore immediately triggered a new geopolitical conflict as Lebanon claimed that part of the gas field lay in Lebanese waters. Lebanon delivered maps to the UN to back its claim, to which Israeli Foreign Minister Lieberman retorted, «We won’t give an inch». The fact is that Israel, like the United States, has never ratified the 1982 UN Convention on Law of the Sea dividing world subsea mineral rights. The gas wells at Leviathan are clearly within undisputed Israeli territory, but Lebanon says the field extends over into its subsea waters. Hezbollah claims that the Tamar gas field belongs to Lebanon. Cyprus has offered to mediate between Lebanon and Israel over a maritime border dispute, but has received no response from either side so far. Lebanon says that the bilateral agreement signed in 2010 between Cyprus and Israel and ratified a year later conflicts with the United Nations Convention on the Law of the Sea. It demands that it be amended in accordance with international laws that govern the demarcation of maritime borders among states. Israel insists that its undersea oil development projects are all in its territorial waters. Both Israel and Lebanon have trillions of cubic feet of underwater natural gas and can benefit tremendously from these resources. However, the problem remains that they need the UN assistance to demarcate the boundary line. Such a process usually occurs through bilateral negotiation or mutually agreed arbitration; however, such an opportunity is missing because the two states are still in a state of war. So far the Israel and Lebanon have dealt with the issue brandishing arms without showing any will to find a mutually advantageous solution.
Cyprus had traditionally sided with the Palestinians and looked apprehensively at Israel building military and trade relations with rival Turkey. It’s all has changed now. The country is involved in working out plans on exploiting the reserves jointly with Israel. One option is to pipe the gas to Cyprus, where it could be processed for export to Europe and beyond. The Israel-Turkey rapprochement is on the minds of Cypriot authorities as future gas revenues are seen as the country’s best hope to overcome the financial morass it has plunged into. Cyprus has looked to Israel to pool their respective gas finds in order to build a gas-processing facility on the island. The United Nations, which supervises a buffer zone between the north and south, has hailed the gas discoveries as a way of generating wealth that could finance a reunification of Cyprus. But there are fears it may turn the other way around and lead to a greater conflict between the island’s two parts. The United States has established its regional headquarters for a new Bureau of Energy Resources in Cyprus. Washington has strongly supported the right of the recognized government of Cyprus to drill in its waters. The US and the EU could have mediated to make a sensible arrangement between southern Cyprus and the Turkish neighbors. But they don’t.
Greece stands to become a major European hub for these energy finds, and longs to develop resources of its own in Greek waters to the west of Cyprus. The hopes are high that Greece could eradicate its debt by exploiting its Mediterranean hydrocarbons. The Greek government openly announces its intention to establish an Exclusive Economic Zone in the Mediterranean. Israel has published a map of a proposed Israel - Cyprus - Greece natural gas pipeline, which follows a route within delineated Greek and Cypriot Exclusive Economic Zones to carry Israeli and Cypriot gas to Greece and then to markets in Italy and Germany. Preliminary estimates show that total offshore oil in Greek waters exceeds 22 billion barrels in the Ionian Sea off western Greece and some 4 billion barrels in the northern Aegean Sea. The exploitation of the reserves already discovered could bring the country more than €302 billion over 25 years. Even if only a fraction of that is available, it would transform the economy Greece and the entire region making it independent from the World Bank and the IMF yoke.
Egypt and Syria are too busy tackling internal problems. Egypt is the second African gas producer with 77 trillion proven reserves. The political instability makes question its reliability as provider, exploration efforts are winding down, security problem coming to surface. Exploration is practically sustained in Syria. There is no sea border delineated between Syria and Cyprus to complicate thing in future. But someday the two will become players in the game. Interesting to note that in July 2011, Syria, Iran and Iraq signed a $10 billion agreement for a gas pipeline from Iran’s Port Assalouyeh near South Pars to Damascus, Syria via Iraq. Iran plans to extend the pipeline from Damascus to Lebanon’s Mediterranean port where it would be delivered to EU markets. Could it have a relation to the ongoing war in Syria is everyone’s guess. Perhaps it gives some clue to understanding the anti-Syrian stance of Qatar, the largest gas exporter.
Chance of naval conflict
A naval conflict is hardly meets the objectives of any state involved. But as history shows, an accidental naval skirmish may lead to a big fire. Dangerous maneuvering may be viewed as a provocation worth of response, especially against the background of exercises. The multinational drills are much more preferable from this point of view. But the trend is not on the rise. Turkey never held joint maneuvers with Israel since 2009. Israel has not taken part in joined naval exercises since 2006, except two large scale drills with the United States. Small navies of Lebanon, Cyprus and Syria have no rich experience of international combined training events.
Russia’s stance on the issue
Israel and Cyprus view Russia as a provider of expertise and the source of potential political support. Not once the Russian Federation has made known its stance that presupposed that Cyprus is a state which has a right for exploration within the boundaries of its exclusive economic zone. The countries in dispute over oil and gas exploration offshore Cyprus should comply with a United Nations convention on the Law of the Sea, said Russian Foreign Minister Sergey Lavrov after a meeting with Cypriot President Demetris Christofias in New York in September 2011. Back then he clearly defined the Russia’s stance by adding, «We hope and encourage all parties involved to refrain from any steps that could worsen the situation and encourage everyone to remain within the legal framework of the Law of the Sea».
After a long period, Moscow has returned to the Mediterranean as a sea power. In 2011 it conducted a naval exercise exceeding in scope any training activity since the days of the Soviet Union. The last large-scale drill took place in January 2013 and involved over 20 combat surface ships and submarines from three operational fleets. «We are not interested in even more destabilization in the Mediterranean region, and our fleet's presence there is certainly a factor stabilizing the situation», Lavrov said at a press conference summing up 2012 events on January 23. «Certainly, we will continue to respond to unfriendly moves but the core of our position is the readiness to develop Russian-U.S. relations in all areas and the interest in coordinated actions on the international scene based on equality, mutual respect for interests and non-interference in each other's internal affairs», the Minister said. The US supports the Cyprus exploration rights too and sees eye to eye with Russia concerning the UN mediation to restore the unity of the island. Perhaps, this is an example of promising prospects for Russia-US cooperation, the both parties talked about during the recent April 14-15 visit to Moscow paid by US National Security Advisor Tom Donilon.
On February 26 a subsidiary of Russian energy giant Gazprom signed a 20-year deal with Levant LNG Marketing Corp. to exclusively purchase liquefied natural gas (LNG) from Israel’s Tamar offshore gas field in the Mediterranean. Gazprom wants to build up its LNG trading business to diversify away from traditional European customers receiving natural gas via pipelines… The Tamar floating LNG project will produce gas from the Tamar and Dalit gas fields off Israel’s east Mediterranean coast. The project is being implemented by the Tamar upstream consortium.
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The gas discoveries are stirring regional turmoil and are provoking different reactions from all the players in the Eastern Mediterranean The situation could be much better in case Israel and Lebanon came to accord on sea border lines, the divided Cyprus found a way to share the newly found riches, Israel and Turkey concluded an international sea incidents prevention agreement. But the time to act is now. When gas flows reach the international markets, probably, later this year, the divisions may exacerbate. Of course, it remains within each state’s authority to defend its rights within its own exclusive economic zone which should be fixed based on the 1982 United Nations Convention on the Law of the Sea. But all the problems of the region: gas wells, cannon boat diplomacy, Arab-Israeli conflict, the status of divided island of Cyprus, the Syrian civil war - all are closely intertwined and related to core national interests of the countries involved. One issue cannot be separated from another. An outside moderator is an imperative. No way could it be done by some mighty outside player like the USA. It’s the mission of the UN as a decision maker to step in and involve the states, that have national interest in the region, as contributors. The time is right to call for a regional conference sponsored by the United Nations with the main task of making negotiations possible between Lebanon and Israel as well as between the Turks and Greeks in Cyprus. International negotiation and arbitration is the way to tackle the complex issues of the region’s newly found wealth."
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