(Newswire.net — December 2, 2020) —
The eastern Mediterranean Sea has become an area of significance for the natural gas exploration industry in recent years. Researchers say that the area has proven reserves of more than 60 trillion cubic feet of gas. The U.S. Geological Survey has even approximated the amount to be as much as 122 trillion cubic feet of gas along with the potential for 1.7 billion barrels of oil. To put that in perspective, it is roughly what the EU will consume over 76 years. As is frequently the case when so much financial potential is on the line, several points of friction have come to the fore between countries in the region, both between those with long-running tensions and those that are otherwise friendly. One example is the series of recent events between Greece and Turkey, which have been of particularly explosive character and which even required the intervention of the EU and US. Another example is the ongoing dispute between Israel and Cyprus over the Aphrodite-Ishai field, which straddles the maritime border of both countries.
Turkey Maneuvering to Keep Itself in the Gas Game
In August 2020, Turkey sent a survey vessel escorted by warships to conduct mapping for possible drilling in territory claimed by both it and Greece. Greece called this activity illegal and demanded that Turkey cease and desist, even threatening to fire on Turkish vessels. The situation has already even resulted in a minor collision between two frigates, and French President Emmanuel Macron found it necessary to send a French ship and two fighter jets to stop further actions by Turkey.
Turkey has been acting primarily out of fear that it will be shut out of the opportunities being found so close to its territory. Consequently, Turkey has refused to recognize the territorial claims of Greece and Cyprus. While those claims are backed by international law, Turkey did not sign the 1982 UN Convention on the Law of the Sea and is thus likely to continue ignoring them.
The tension between Turkey and Greece also extends to the coast of Cyprus, where the two countries have a longstanding dispute. Turkey continues to drill there as well, even announcing in August that it was assigning a designated drillship to do so. Many in the EU have not looked well upon Turkey’s actions, but Turkish President Recep Tayyip Erdogan has denounced European efforts to stop him and has refused to back down. The United States has also been working against Turkey in the Mediterranean, making moves to support American energy companies and attempting to develop new gas sources.
The Dispute Between Israel and Cyprus Over Aphrodite
The Aphrodite natural gas field was discovered in 2011. It has tremendous potential for development, with reserves estimated to be around 127 billion cubic meters and the opportunity to earn over $9 billion in under 20 years. It has enough gas to serve as a source of international export and has political implications for relations with neighboring countries such as Egypt, which has an accessible liquefaction plant. George Lakkotrypis, Cyprus’s former energy minister, said that the field could provide his country with $520 million a year from whenever production begins, which is estimated to be in 2025.
The reserve runs right on the border of the exclusive economic zones of Cyprus and Israel, placing it mostly in Cypriot waters but partially in Israeli waters as well. There is consensus over the maritime border between the two countries, based on an agreement between them that was signed in 2010. However, the reserve is situated in such a way that gas cannot be extracted from its Cypriot side without inherently reducing the amount available on the Israeli side. To make matters more complex, Israeli companies, such as Delek Drilling, have a stake in the development of the Cypriot side.
To resolve the situation and move forward, the governments of Israel and Cyprus have been in talks for several years, but they have not been able to reach an agreement. In 2018, despite the absence of an agreement, the companies involved on the Cypriot side—Delek Drilling, Noble Energy, and Royal Dutch Shell—signed an agreement for the next 25 years to begin developing the reserve. In September of that year, Cyprus and Egypt agreed to build an undersea natural gas pipeline from Aphrodite to Royal Dutch Shell’s liquefaction plant in Egypt. Then, in November 2019, the plan to develop the field was formally approved by the Cypriot government, which envisions some $2.5 million to $3.5 million to be invested in Aphrodite’s development over four to six years. The plan includes within it the aforementioned 2018 agreement to construct infrastructure for exporting the gas to Egypt. These agreements consequently implied that the partners on the Cypriot side intended to move forward to develop the reserve without necessarily receiving Israeli agreement. As a result, the Israeli Energy Ministry advised the partners not to begin work on Aphrodite until an agreement would actually be reached.
The Impact of COVID-19
COVID-19 has had somewhat of an effect on the overall situation in 2020 due to restrictions on drilling-crew mobility and drops in energy prices. Energy companies have also reduced their spending as a result. Nevertheless, disputes and tensions are not going away any time soon. With so much gas and oil potential at stake, solutions will have to be found so as to prevent diplomatic deadlock, or worse, between the countries in the region.