Research on the Levant Basin dates back to 2010 when the Leviathan block was first discovered by Ratio Oil. Following this, companies like US-owned Noble Energy and French giant Total E&P began to actively show interest in the region. Following discoveries in the Israeli and Cypriot Exclusive Economic Zones (EEZ), Italy's Eni had "outstanding" results in the Zohr field in Egypt.
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Partnering up on hydrocarbons: An energy dispute
Regional countries stand to benefit from the discovery of hydrocarbons. This includes strong economic incentives, both for the EU, as well as partner states. Cyprus, Egypt, Lebanon, and Israel have all recently pushed for stronger economic cooperation. In fact, Cyprus views itself as a 'bridge' between the EU and ME given its efforts to engage in tripartite partnerships. Additionally, it has been argued that closer economic cooperation might lead to overall stronger relations, confidence-building, and greater peace prospects. As a result, Eastern Mediterranean countries have pursued a series of negotiations and trilaterals to discuss the creation of an 'EastMed' pipeline. The pipeline would ensure energy transfers and exports to the EU.
However, this ideal situation is unlikely to be realised. It is not yielding concrete results given the stressed regional relations inhibiting collaboration. Instead, these new developments have created growing security risks. These tripartite partnerships with Cyprus and Greece exist because of hostility between some states. Lebanon and Egypt are not on the best terms with Israel. This is particularly because of the Palestinian conflict, but also because of historic hostilities that have driven each state's foreign and security policies. An example is that of the historical Arab-Israeli wars and the Lebanese Civil War.
Furthermore, Turkey hopes to have a share of the pie. It has a large accumulation of military presence abroad in occupied territories of Syria and Cyprus. Vessels are also used to conduct research on energy resources. Example, the RV Barbaros Hayreddin Pa?a that violates the Republic of Cyprus' EEZ. Relations between Cyprus and Turkey severed in 1974 but the ongoing dispute and Cypriot conflict date decades back.
Borders, Discoveries, and Trilaterals
Cyprus declared its EEZ back in 2004 clearly identifying the fields that fall under its territory. This includes offshore fields that hold hydrocarbons reserves. The first discovery was made in 2011 by Noble Energy, an American oil and gas exploration and production company, in the Aphrodite field, which partially falls into Israeli EEZ.
Since then, other companies showed great interest in getting involved in the Eastern Mediterranean fields. This includes Italian ENI discovering more reserves in Calypso in 2018. ExxonMobil earlier this year declared "encouraging results" in the Glafkos field, just south of Limassol. This puts an additional reserve between 5 trillion and 8 trillion cubic feet of natural gas.
These discoveries have prompted several talks and tripartite negotiations. Amongst these discussions, the idea of the EU-funded EastMed project was born. EastMed aims at fostering greater cooperation between the EU and the Eastern Mediterranean. Cypriot Foreign Minister Nicos Christodoulides' comments emphasise the benefits and significance of these trilaterals in the geopolitical sense. These include good prospects for a cost-effective mechanism that would address "energy security needs of the region" according to Christodoulides. He also explained how important the project is for countries like Cyprus in "promoting regional stability, energy security and counterterrorism". Related: Oil Sands M&A Grinds To A Halt
Nevertheless, the usefulness of these trilateral relations are questionable. National audiences positively receive these talks but it is yet to provide substance. For instance, Cyprus originally hoped to use the reserves to address the Cypriot conflict with Turkey. However, the discovery of hydrocarbons has only fueled more tensions with Ankara and not offered a breakthrough.
Profiling the political impediments
Egypt: Earlier in February 2019, it rejected the proposals put forward by partners on securing safe passage for the EastMed pipeline. Instead, Cairo suggested using alternative routes, as this pipeline would be rather costly and unsustainable in the long run.
Cyprus: The unresolved and costly Cypriot conflict impacts foreign policy. Rooted before the island's de facto division in 1974, this has been the main driver of Cypriot diplomacy. It has compromised focus on other priorities, such as unemployment, crime, and social welfare. It also makes Cyprus an unreliable partner over energy-related, as well as EU security and accession-related matters. This is particularly because of the growing involvement of Turkey in the Cypriot EEZ.
Turkey: With a military presence in Syria and Cyprus, Turkey has pursued its own set of ambitions in the region. This has included tackling Kurdish opposition and exploiting energy. Its self-proclaimed 'Turkish Republic of Northern Cyprus' (TRNC) is not recognised as legitimate internationally. As a result, Turkey often uses the Cypriot conflict in order to justify its own actions in the Eastern Mediterranean. The Cypriot conflict also has prevented Turkey from fulfilling EU accession requirements.
Greece: Amidst economic instability and a looming crisis, Greece does not have the technology nor the funds to sustain the vision of the trilateral partnerships. Simultaneously, the country is unable to provide energy for its own population. This poses a serious security risk, making Greece an unreliable partner unless the country's economic problems are first addressed.
Lebanon: Lebanon has rejected the EastMed pipeline passing through its territory. The conflict in neighbouring Syria, as well as growing disputes with Israel strongly inhibit a unifying Eastern Mediterranean partnership. The Hezbollah-dominated government has specifically challenged Israeli ownership of the Leviathan field. This puts additional strains on future partnerships.
Israel: Prior to the hydrocarbons discovery, Cyprus and Israel were not close allies. The discovery upgraded economic and diplomatic relations with both Cyprus and Greece. Israel has also sought to help boost the security apparatus of its allies. Despite criticisms that have emerged about its behaviour towards Arabs and Palestinians, Israel has not held back. The state has even used disputes to improve its regional status, including territorial recognition of the Golan Heights.
Calls for a new security infrastructure
Several benefits can be accumulated from a healthy partnership over energy in the Eastern Mediterranean and the Levant Basin. This includes new and reliable trade routes, transportation, diplomatic and economic support, and technological exchanges. As it currently stands, the security mechanisms currently in place do not accommodate thriving cooperation.
Related: Venezuela's Oil Production In Jeopardy After New Blackout
As Egypt and Lebanon express concerns over the EastMed project, it becomes apparent that there are no strong guarantees in place to ensure a long-lasting partnership. The geopolitical implications also present high stakes, as these external factors are primarily for shaping policy.
There is a growing need to focus on a 'win-win' situation rather than a zero-sum game. Firstly, the end-game of all the actors involved needs identification. This is the successful delivery of energy. Secondly, those involved in the extraction and production process, including the countries hosting the offshore fields, must understand each other's conflicts. However, an outdated security apparatus is in place. Currently overcoming long-lasting interstate conflicts in the region is not within reach, at least not in the short run. If the benefits derived out of an Eastern Mediterranean-wide partnership supercede the drawbacks, then resolving the deadlock becomes more likely in the long run. Regional cooperation can prevent full-scale confrontation because of interdependency. This is a likely scenario that countries might opt in for. Alternatives to this present higher costs and an increased likelihood of escalating tensions.
By Petros Petrikkos via Global Risk Insights
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Comments
The balance of power on (and in) the Eastern Mediterranean should not be taken for granted.
Cyprus, because of its geographic location represents the cross road to three continents. It is small, let's remember it "belongs" to Cypriots, who for millennia have refined their ability to facilitate trade. Indeed, the success of the Tripartite meetings is not clear. I find them most encouraging because , between these countries little else marks their relationship with such a positive tone. It would take a small change in intentions for Turkey to join with her neighbors in cooperation; Cyprus, Syria, Turkey, and, Turkey, Cyprus, Greece, are two Tripartite rounds i'd like to see in the near future. Instead of the "but one", Erdogan may choose to make an ally of Cyprus, which has for decades demonstrated an ability to be as an adversary, Turkey's equal.
The discovery of these reserves are stirring the pot of regional turmoil and provoking various reactions from the other players in the area. It is also opening up new economic opportunities and redefining strategic relationships.
The huge gas riches could either exacerbate an already very tense and dangerous situation in the area or could lead to a reduction of tension and mutual benefits to all.
And while the gas riches will not bring peace to the Levant basin, they could at least help reduce tension and defuse an explosive situation between the parties involved and help create economic prosperity in the region. However, to achieve these objectives, three essential conditions must be met.
The first is an Israeli withdrawal from Lebanese maritime exclusive economic zone (EEZ). The two nations are squabbling over the right to claim an 860 kilometre (332 square miles) triangular area as part of their respective exclusive economic zones.
Lebanon and Israel have not defined their maritime border since the withdrawal of Israeli troops from Lebanon in 2000, leaving a slice of contested territory. The maritime dispute between Lebanon and Israel dates back to the discovery of the huge Israeli gas field known as the Leviathan in 2010 proven reserves of 25 trillion cubic feet (tcf).
The development of the Leviathan triggered a boundary dispute between Lebanon and Israel with Lebanon accusing Israel of violating its maritime rights. Lebanon says that up to one-third of the Leviathan gas field could be inside its maritime border. When Israeli troops withdrew from Lebanon in 2000, the U.N.-sanctioned Blue Line became the de facto land border between the two countries. Israel unilaterally extended a line of buoys out into the sea to approximate a maritime border. But Lebanese officials say the angle Israel took from the shore gives it more territorial water than it deserves.
Tensions rose after Lebanon called an oil and gas exploration tender in disputed territory. Lebanon and Israel have an unresolved maritime border dispute over a triangular area that extends along the southern edge of three of Lebanon’s 10 blocks.
The recent US mediation between Lebanon and Israel failed according to Lebanese media because it meant dividing the disputed maritime area between Israel and Lebanon, something Lebanon adamantly refuses to agree to. Lebanon will not accept any encroachment on its economic maritime zone or sharing the natural gas resources in the disputed area with Israel.
Tension between Lebanon and Israel escalated further when Lebanon warned that it could act against Israeli gas facilities if Israel tried to interfere in its development of the gas resources under its waters.
The second condition is Turkey’s insistence that the Turkish Cypriots should get a fair share of any revenue from the discovered gas reserves offshore Cyprus or it will never allow the Greek Cypriots to produce more gas let alone export it.
A third condition is Turkey’s insistence on a settlement of an overlapping dispute in the mutual exclusive economic zones with Cyprus. Turkey will not let Cyprus explore for gas and oil in the disputed area until a settlement is reached.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London