zohr egypt field

Egypt’s new gas discovery changes the geopolitical game in the Eastern Mediterranean again :Turkish energy firms in talks with (Greek) Cypriots over natural gas

The Zohr field’s discovery on August 30 firms up the potential for a new Mediterranean hub, which can receive gas from some of the biggest newcomers in the industry and send it on to the EU, a market that’s desperate to diversify its supply.

zohr oil and gas

oil and gas eastern mediterranean delimitation zones

For Eni, the idea (ideally) would be to connect subsea fields in Israel and Cyprus to Egypt’s pipeline network.

Eni’s Zohr discovery is the largest-ever in the Mediterranean Sea, with an estimated 850 billion cubic meters of gas. Combined, Egypt, Cyprus and Israel now have roughly 2 trillion cubic meters, which is huge (in comparison, Europe’s largest gas field, the Groningen in the Netherlands, had 2.8 trillion cubic meters when it was discovered in 1959).

According to a Reuters report, should Cairo successfully move towards natural gas exports, it would likely have a significant impact on plans for Israel to exports its own gas finds, which has included potential deals with Egypt.

“The giant gas field discovery in Egypt is a painful reminder that while Israel has been ‘sleepwalking’ and delaying the final approval of the gas outline and holding up further exploration, the world is changing in front of our eyes, including the implications on export possibilities,” Israeli Energy Minister Yuval Steinitz was quoted as saying.

The report also suggested company interest in natural gas from Noble Energy’s 4.5 tcf Aphrodite field in Cyprus’ Block 12.

“We have an energy plant that is empty, and so that could be an opportunity for gas that has been found in Cyprus to find (its) way to Europe,” Eni’s Chief Executive Officer Claudio Descalzi said, according to the report.

Eni expects to start producing Zohr gas by 2017 and, if the initial estimates are correct, believes it could fulfill Egyptian demand for a decade. The company still needs to secure final approvals from Cairo, but believes the government is equally keen to get the work done quickly to feed a gas-hungry domestic market.

Egypt’s liquefied natural gas (LNG) plant has been at a standstill since January 2014, when operator BG Group was forced to halt exports because domestic demand was too high. The country then started receiving LNG cargoes at a new import terminal this year, and is now looking to build a second.

The Eastern Mediterranean Geopolitics

The hydrocarbons bonanza has led to closer cooperation in the Mediterranean. Multiple partnerships have emerged including Israel-Cyprus-Greece, Egypt-Israel-Cyprus and Cyprus-Greece-Egypt, all enhancing energy and security ties through agreements and joint naval exercises.

We assisted, in 2014, Cyprus, Egypt, and Greece held a tripartite summit meeting, culminating in the signing of the Cairo Declaration, enhancing cooperation on multiple fronts, such as energy, security, tourism, and economic development. The recent meeting between the CYpriot and the EGyptian president this week might issue in a new appointment for a new tripartite summit meeting with Greece.

Apart from common interests in economic development and regional security, these actors all share poor relations with Turkey.

  • Once strong partners, Israel-Turkey relations soured after the 2010 Mavi Marmara Gaza flotilla raid incident.
  • Egypt-Turkey relations deteriorated following the military ousting of former President Morsi, given the political and ideological relationship between the Muslim Brotherhood and Turkey’s leading AKP party.
  • Israeli-Egyptian relations have improved since Morsi’s departure as the new regime and Jerusalem both seek to contain radical Islam.

Egypt, Cyprus and Turkey

Zohr is also close to Cyprus’ offshore block 11 which is licensed to French major Total and the reservoir may extend across the maritime border, creating opportunities for explorers on the Cypriot side.

Israel and Cyprus already have plans to export gas to Egypt but progress has been slowed by regulatory interference and dragging negotiations.

Pulling off the hub project will not be easy given the region’s tangle of political disputes.

Turkey opposes any export of Cypriot gas reserves until a long-standing dispute over territory is cleared up and a mechanism for sharing gas profits between the Turkish and Cypriot sides of the island are put in place.

Turkey also sees itself as the region’s energy hub, as new pipelines feeding Caspian gas to Europe run across its territory, and may balk at potentially losing ground to Egypt.

Turkish apprehension of an eastern Mediterranean gas hub between Israel and Cyprus has increased, given their own ambitions to become a transit hub to Europe. Indeed, Turkey ramped up naval exercises and in 2014 sent their own exploration vessel, Barbaros, to disputed waters, accompanied by Turkish warships.

Any sort of gun boat diplomacy should be deterred, however, given the improving relationship between Egypt, Cyprus, and Israel with Russia. Russia has conducted multiple naval exercises in the Mediterranean, as well, and has cooperation agreement with Cyprus to use its port and bases in cases of emergency.

What are the possible routes to transfer these findings across the Eastern Mediterranean hub?

proposed routes for gas eastern mediterranean

With their significant natural gas finds, Egypt, Cyprus, and Israel all look to become net energy exporters, while Turkey and Greece want to benefit as conduits for the European market. So, post Zohr field discovery, what options remain?

The easiest and cheapest option for both Cyprus and Israel is to create a pipeline to Turkey, which would act as a transit hub to reach the European export market. To date, politics have precluded this as a solution to the Cyprus conflict as a prerequisite, while any pipeline from Israeli fields would have to pass through Cyprus’ EEZ.

However, the gas finds have catalyzed unification efforts on the island, as the latest rounds of talks between the Greeks and Turkish Cypriots have more chances to give something than before And Israel will continue to seek ways to normalize relations with Turkey.

Given Turkey’s domestic turmoil and Syrian involvement, President Erdogan could divert attention and score a quick win here. In this scenario, Turkey can improve relations with its neighbors, establish itself as an energy transit hub, and remove obstacles to further European integration.(No i’m not a propaganda machine)

Cyprus in talks with Turkish companies for transferring natural gas from Israel to Turkey through Cyprus

According to Hürriyet Daily News, Turkish oil companies are in secret talks with the Cypriot leader Nikos Anastasiadis, Turkish Cypriot community leader Mustafa Akıncı has stated.

Nonetheless, the Cypriot government spokesperson Nikos Hristodoulidis has issued a slight correction to Akıncı’s remarks, saying the talks were not confidential and were openly known, and that even a Turkish public-owned corporation was among them. 

Anastasiadis is in talks with Turkish companies that aim to purchase the natural gas off Cyprus’ coast and the talks are well known by everyone, including Greek Cypriot political parties, Hristodoulidis said, stressing that this dialogue was an “important development.”

Anastasiadis’ response to Turkish companies is that cooperation on natural gas could only be realized after a solution to the divided island’s political problem, he added.

Nearly 10 Turkish companies including Turcas and Zorlu are interested in constructing a pipeline that will bring Israeli natural gas to Turkey, which is likely to cross near the island of Cyprus.

Source: Cyprus picks U.S.-based NEOS for oil, gas mapping | Business , Regional | THE DAILY STAR

Cyprus has selected California-based NEOS Geosystems to create a three-dimensional map of the island nation’s onshore and near-shore oil and gas prospects, the Ministry of Energy, Commerce, Industry and Tourism announced on Monday.

“The new dataset will be non-exclusive,” Minister Giorgos Lakkotrypis explained, “allowing prospective participants in Cyprus’ emerging hydrocarbon sector to acquire crucial information to help guide their respective investment, exploration and development decisions.”

NEOS, a global leader in the field, employs a unique combination of proprietary processes and technologies and information already available to build its maps, including multiple ground and airborne sensors and supercomputers running advanced analytics software developed in Silicon Valley. According to Jim Hollis, the company’s CEO, this allows a “quantitative integration of disparate imaging data that provides a faster, better and more-cost-effective workflow in previously underexplored areas.”

Supported by a group of high-profile investors that includes Microsoft founder Bill Gates, and venture capital firm KCPG (a ground-floor backer of Amazon, Google, and Sun Microsystems), investment banking giant Goldman Sachs, NEOS’ approach has won high praise from Super Majors and other key players in the oil and gas industry.

The company and its investment partners in the Cyprus venture – Beirut-based firms Energy & Environment Holding (EEH) and Petroserv – first applied its unique methodologies in the Eastern Mediterranean by carrying out a similar study for nearby Lebanon’s CedarsOil project.

“Thanks to the dataset acquired by NEOS, Lebanon looks more promising than ever, (Italy’s) ENI has discovered a supergiant gas field in neighboring Egyptian waters immediately adjacent to Total’s sector offshore Cyprus, and the latest news from Syria is encouraging too,” the Ministry quoted Baroudi as saying.

Apart from the onshore and near-shore survey, the agreement also contains an option for NEOS to expand its work offshore into deeper waters.
Related Articles:
Lebanon Onshore Oil and Gas ‘Promising’
The completion of the CedarsOil Lebanon neoBASIN Project
Energy: Turkish Continuous Provocations in the East Mediterranean



3 thoughts on “Egypt’s new gas discovery changes the geopolitical game in the Eastern Mediterranean again :Turkish energy firms in talks with (Greek) Cypriots over natural gas”

Thank you for your contribution

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s