 |
Louisiana Light • 4 days | 87.12 | +0.63 | +0.73% | ||
|
Bonny Light • 3 days | 90.15 | +1.75 | +1.98% | ||
|
Opec Basket • 4 days | 88.39 | -0.06 | -0.07% | ||
|
Mars US • 177 days | 77.26 | -1.51 | -1.92% | ||
|
Gasoline • 2 days | 2.765 | +0.006 | +0.23% |
|
Bonny Light • 3 days | 90.15 | +1.75 | +1.98% | ||
|
Girassol • 3 days | 90.85 | +1.82 | +2.04% | ||
|
Opec Basket • 4 days | 88.39 | -0.06 | -0.07% |
|
Peace Sour • 2 days | 76.77 | +0.76 | +1.00% | ||
|
Light Sour Blend • 2 days | 79.82 | +0.76 | +0.96% | ||
|
Syncrude Sweet Premium • 2 days | 86.77 | +0.76 | +0.88% | ||
|
Central Alberta • 2 days | 77.17 | +0.76 | +0.99% |
|
Eagle Ford • 4 days | 80.05 | +0.76 | +0.96% | ||
|
Oklahoma Sweet • 4 days | 80.00 | +0.75 | +0.95% | ||
|
Kansas Common • 4 days | 73.75 | +0.75 | +1.03% | ||
|
Buena Vista • 5 days | 87.23 | -0.55 | -0.63% |
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Exxon Signs Deals With Egypt For Oil, Gas Exploration in East Mediterranean
ExxonMobil and Egypt have signed two oil and gas exploration deals in the Eastern Mediterranean, the Egyptian Ministry of Petroleum said on Tuesday, weeks after Exxon said it had secured exploration acreage offshore Egypt.
The two exploration deals call for a total investment of at least US$332 million, according to a statement from Egypt’s petroleum ministry, carried by Reuters.
At the end of 2019, ExxonMobil said that it had acquired more than 1.7 million acres offshore Egypt, adding upstream interests to its downstream business in the country.
Exxon bought the 1.2-million-acre North Marakia Offshore block, five miles offshore Egypt’s northern coast and 543,000 acres in the North East El Amriya Offshore block in the Nile Delta. ExxonMobil, which will be the operator of both blocks with 100-percent interest, plans to start exploration operations this year.
“These awards strengthen our exploration portfolio in the Eastern Mediterranean,” Mike Cousins, senior vice president of exploration and new ventures at ExxonMobil, said in a statement at the end of December.
Last year, Exxon made a natural gas discovery at the Glaucus-1 well in a block offshore Cyprus.
Offshore Egypt, the discovery of the giant Zohr gas field in 2015 has sparked interest in more exploration in the Mediterranean.
Exxon’s foray into Egypt’s upstream comes at a time of heightened tensions in the Eastern Mediterranean, where Turkey, Greece, and Cyprus are at odds over Turkey’s claim to natural gas resources recently discovered offshore Cyprus.
Turkey will continue exploring for oil and gas in the eastern Mediterranean waters around disputed Cyprus, and “No project can be realised if Turkey and the Turkish Republic of Northern Cyprus are not involved,” Turkey’s President Recep Tayyip Erdo?an said in August last year.
Since then, Ankara has been moving forward with its drilling plans despite criticism from not just Cyprus but also Greece and the European Union. Earlier this month, the EU warned Turkey to reconsider its drilling plans after Erdogan said drilling would start “as soon as possible.” The EU also called these exploration plans illegal.
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The agreement with Egypt comes at a time of heightened tensions in the Eastern Mediterranean between turkey and Cyprus over Turkey’s claim to natural gas resources recently discovered offshore Cyprus.
Turkey has three main objectives in the energy scene in the European Union (EU) and the Eastern Mediterranean.
The first is to establish itself as the uncontested energy hub for the EU. This has been consolidated by the completion of the Turk Stream gas pipeline which will bring Russian gas supplies under the Black Sea to Turkey and markets in southeastern and the Southern Gas Corridor (SGC) bringing Caspian gas from Azerbaijan to Turkey and then to the EU via the Trans Adriatic Pipeline (TAP).
The second objective is to ensure that the Turkish Cypriots get a fair share from natural gas discoveries offshore Cyprus estimated by some accounts to be worth $44.8 bn. Turkish President Recep Tayyip Erdogan said in August last year that “No project can be realized if Turkey and the Turkish Republic of Northern Cyprus are not involved”.
The third objective is to prevent the construction of EastMed gas pipeline by Israel, Greece and Cyprus to bring Israeli and Cypriot natural gas under the Mediterranean to the EU via the Greek mainland. Turkey opposes it because it will compete with the Turk Stream and also with the SGC.
However, it seems that the EastMed estimated to stretch over a distance of 1900 km and costing an estimated $7 bn may never see the light of day. Cyprus has yet to discover any sizeable gas fields like Egypt’s Zohr and Israel’s Leviathan other than the two relatively small gas fields: the 6-8 tcf Calypso, the 4.5 tcf Aphrodite and the recently ExxonMobil-discovered Glaucus-1 (5-8 tcf).
If we judge the viability of the EastMed by the current situation, there is only Calypso and Israel to fill the pipeline. Israel has already signed a deal for Israeli gas exports to be sent to Egypt for conversion to LNG and re-exporting. Cyprus on its own couldn’t muster enough gas to fill the EastMed annual throughput capacity of 20 billion cubic metres (bcm).
Still, the Eastern Mediterranean gas producers will have to eventually reach an accommodation with Turkey if they want a peaceful and lucrative development of their gas riches.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London