Some Important Points:
- Cyprus and Egypt must be very careful as a member of the EU the first and an Arab state the latter when they sign bilateral agreements with Israel. On the one hand, funds from natural gas reserves could fund further colonization and war regarding the Israelo-Palestinian conflict. Recently, Israel,has approved a further expansion of its colonial settlement enterprise in Occupied Palestine with thousands of new units to further deny the people of Palestine the right to freedom and self-determination. On the other hand, Cyprus could offer its assistance regarding the Israeli-Lebanon maritime dispute but the conflict is more deeper as these countries were involved into a war 10 years ago.
- Turkey will always search to influence political happenings in the Near East. There is still the possibility on the table to transit the Natural Gas discoveries to Europe through a pipeline passing Turkey. Unfortunately, Turkey is an unstable country at the moment after last years’ failed-coup. The major risk is that Turkey cuts the gas suppy of this possible pipeline in order to put pressure for any political purpose.
Last year Eni discovered large offshore reserves at Zohr discovery off Egypt that could reach 850 billion cbm. The discovery of Zohr raised hopes that new reserves can be found near the island of Cyprus.
In November 2011 Turkey’s national oil company TPAO signed an accord with Shell for hydrocarbon exploration and production in the Mediterranean and southeastern Turkey.
To date, TPAO’s exploration activities have been focused on the gulf of Antalya, Iskenderun bay and Mersin bay in the eastern Mediterranean.
The American company Exxon Mobile, French Total, Italian Eni and Qatar Petroleum received contracts for studies of hydrocarbons in the waters near the island of Cyprus. Eni and Total, each with 50% share, received license to explore Block 6 in Cyprus offshore zone. The applicants selected in the third licensing round are the consortium of ENI and Total for Block 6, Eni for Block 8 and the consortium of ExxonMobil and Qatar Petroleum for Block 10.
With the deal Eni has gained the right to explore an area of 2,215 sq km near the giant Zohr discovery off Egypt, which is not far from the listed blocks.
Drilling campaigns will start this year with an exploration well for Total in Block 11, which lies about six kilometres from the Zohr discovery. ENI will drill two wells in its previously acquired blocks (2, 3 and 9) and most probably in the new ones beginning of next year. ENI recently signed a farm-in agreement with Total, acquiring a 50 per cent participating interest in Block 11.
According to Cyprus Mail, Cyprus is still generating power with expensive and environmental-unfriendly fuel. Therefore, switching to gas as soon as possible would bring many benefits to the country. The first benefit would be cheap electricity production. The kilowatt-hour price of power in Cyprus is the second highest in the EU. Having a low electricity price will have a very positive effect on the country’s tourism industry as well as on its manufacturing industry. At the same time, it will lessen the burden on the state and on municipalities’ budgets and consequently on the state deficit, as these are among the biggest electricity consumers in the country.
Turkey has warned the island over moving ahead with planned drilling without a Cyprus settlement and has threatened it would do whatever was necessary to stop the move.
Government Spokesman Nicos Christodoulides said on Sunday that US Deputy Assistant Secretary for Energy Diplomacy, at the Department of State’s Bureau of Energy Resources, Robin Dunnigan is due on the island on Wednesday. Dunnigan’s presence on the island would demonstrate US support and was at the same time a vote of confidence and an answer to “those who question the Cyprus Republic’s exercise of its sovereign rights” he added.
Globes Israel reported last month that Exxon Mobile has expressed interest in bidding for Israeli natural gas tenders after winning a Cypriot government tender. The Israeli Minister of National Infrastructure, Energy and Water Resources Yuval Steinitz associates say that since Exxon is starting to prepare for activity in a nearby area, the company believes that it is likely to prove worthwhile to develop parallel activity in Israel, and to use the same transportation infrastructure to export gas discovered in both countries to Europe.
At the same time in near Jordan,according to Al-Monitor, voices opposed to a gas sales and purchase agreement (GSPA) signed in September between Jordan’s National Electric Power Company and the operator of an Israeli gas field got louder March 20 when the Jordanian parliament obtained a copy of the agreement, whose details had been kept secret.
Despite assorted commercial and political dealings between Jordan and Israel, 23 years after the signing of the peace treaty with Israel, Jordanians still boycott Israeli products. In October, as part of a campaign called The Enemy’s Gas Is Occupation, Jordanians protesting the GSPA with Noble Energy turned the electricity off in their homes from 9 p.m. to 10 p.m. to send a message to the Jordan Electricity Company demanding that the state refrain from importing Israeli gas. Protesters also staged a series of sit-ins and marches, including a sit-in in January against Arab Potash, accusing it of paying $500 million for gas viewed as stolen from Palestine and whose proceeds would in part revert to Israel and therefore help fund the occupation and war.
On the other hand, Israel is mulling a new law on offshore zones which Lebanon sees as laying claim to a disputed 860 km² block. A spokeswoman for Israel’s energy ministry told NGW: “The maritime zones law is intended to precisely define the various maritime zones according to the international law and the Israeli laws that will prevail there. As for the disputed zone with Lebanon, Israel did not include it in its competitive licensing round zones in question. Israel is open to every dialogue in order to solve the dispute while safeguarding the Israeli interests.”
Earlier this month, the new Lebanese government, led by President Michel Aoun, published a tender to explore untapped gas and oil reserves that lie in the eastern Mediterranean. Between Israel and Lebanon there is an area claimed by both countries that covers a triangular expanse of approximately 800sq km, which is rich in coveted natural resources like gas and oil.
Lebanese Minister of Energy and Water Cesar Abou Khalil has said that the offshore resources could be a major economic boost for the country at a time when its financial lifelines, namely tourism, have taken a major hit due to the ongoing war in neighbouring Syria.
The fate of the project is now in jeopardy after Israel made the claim this week that the maritime area off the coast of the Israel-Lebanon border is “Israeli territory”, thus should be placed under Israeli sovereign control. Following that proclamation, the Israeli government announced that the Knesset will soon vote on a bill clearly defining where its maritime economic border with Lebanon lies.
In response, Lebanon’s parliament speaker, Nabih Berri, said last week that the Israeli bill claiming the 860sq km zone was a “new attack on Lebanon’s sovereignty”. “The recent decision taken by Israel on the territorial waters is equal to a declaration of war on Lebanon,” he told local media.
Both countries have made claims to the ocean territory for decades, but the dispute was exacerbated following separate maritime agreements with Cyprus, signed by Lebanon in 2007 and Israel in 2010.
For Egypt, Cypriot gas supplies are critical to turning Egypt into the Eastern Mediterranean region’s clearinghouse for the export of natural gas. Supplies from Cyprus combined with supplies from Israel and/or new finds off Egypt’s coast could supply Egypt’s now dormant liquefied natural gas (LNG) plants, transforming Egypt into a major transport node for the export of natural gas to Europe.
BP said March 27 it has made its third gas discovery in Egypt’s North Damietta offshore concession in the east Nile Delta, in which BP has 100% equity.
Outside of OPEC, Egypt is one of the biggest oil producers in Africa. Yet the country has often swung from being a net exporter of oil and gas to a net importer, and since the political unrest of 2011, it has largely remained in the latter category.
Today the country needs to end its reliance on costly imports, but also attract foreign investment to pay off mounting debts it has accrued with foreign firms, including Shell, which reached $3.5bn by the end of December 2016.
In an interview with Egyptian petroleum minister Tareq el-Molla on BP’s website, Egypt’s minister is quoted as saying that four big gas developments, in which BP is a partner or operator, namely WND, Atoll, Zohr and Nooros will account for total production of more than 5.5bn ft3/d by around 2020. He said that could be enough to generate a surplus available for gas exports, and said Egypt’s 2016 agreement with Cyprus that includes the possibility in future for Cypriot gas to come to Egypt for either the latter’s domestic market but also for export through Egypt’s Idku and Damietta liquefaction plants.
- Sources: Natural Gas World, Cyprus Mail, Hurriyet Daily News, Globes.co.il, Al-Monitor, Al-Jazeera, Daily News Egypt.