The discovery of natural gas in the Mediterranean poses unique challenges to the major players involved in the region – notably, Israel, Turkey, Cyprus, Egypt, Jordan, Syria, Palestine, Lebanon…and Russia? With increasing volatility and energy supply disruptions in the MENA region attributed to the Arab Spring, coup d’états in Egypt and the outbreak of civil war in Syria, the stakes are high for all countries involved in natural gas exploration and drilling. However, maritime boundary disputes over unilaterally declared exclusive economic zones (EEZ), ownership rights, historical rivalries and The Cyprus Question all stand in the way of cooperative drilling in the Tamar and Leviathan fields, which collectively hold an estimated 730 billion cubic meters (26 trillion cubic feet) of natural gas.
The basic premises of the resource curse, most prominently laid out by Michael L. Ross in The Oil Curse, are well known. Non-renewable resources create rents, rents create incentives to monopolize rent windfalls, rent windfalls create structural winners and losers and in the end the winners will attempt to fortify their position (often through un-democratic means) while the losers are coerced into submission or rebellion. Why should this time be any different? This time is different because all actors have a vested interest in pursuing the wealth beneath the ocean floor and interstate cooperation will be necessary given the shortfall in capital and technology facing many of the individual actors involved. Furthermore, with economic and security concerns at an unusually volatile historical high across the region, all actors have an interest in pooling resources together in order to develop and profit from the major gas fields in the Eastern Mediterranean. The question is whether or not these profit incentives are strong enough to outweigh the historical rifts that run through the region like a dividing wedge.
The Tamar gas field discovery in January 2009 by the Houston based Noble Energy was the largest deep-water natural gas discovery in the world at the time. It was quickly followed by an even more incredible find, the Leviathan gas field, with an estimated 19 tcf, which in layman’s terms is an equivalent supply of gas reserves to meet the whole of Europe’s energy needs for over one year. Since its discovery, it has quickly drawn the attention of local and international players for various geo-strategic considerations. And here’s why:
The running joke in Israel is that Moses led his people across the desert for 40 years to reach an area with no natural resources. However, that may be changing. Gas discoveries in the Eastern Mediterranean region have the potential to turn Israel into a gas exporter and diversify their energy supply from their more volatile neighbors. Furthermore, Israeli gas exports to Egypt and Turkey could help strengthen bonds that have taken turns for the worst in recent years, following the upheaval in Egypt that will soon witness the installation of Field Marshal Abdel Fattah al-Sisi as president and the 2010 Israeli raid of the Mavi Marmara that left nine Turks dead. Just last month a $500 million natural gas deal was signed with neighboring Jordan. This model of cooperation and energy integration could potentially pave the way for increased future trade ties, solidifying Israel’s strategic energy position in the region, especially as inefficient domestic energy subsidies in many of Israel’s Arab neighbors become increasingly unsustainable on state coffers.
Turkey is in the process of positioning itself as an alternative transit gas hub for Europe. However, in order to position itself as a major gas hub to meet European energy needs, Turkey must first come to terms with Israel. The relations of the two countries have been warming since Israel apologized for the Mavi Marmara incident (sighted above) last year. Furthermore, hints of Israeli remunerations for the families of the dead may soon be coming following spring elections – a sign that both countries are trying to heal old wounds in order to ensure future energy cooperation.
The Cyprus Question remains the elephant in the room. Cyprus would like to build a liquefied natural gas (LNG) refinery in order to pool Leviathan and Aphrodite gas for export. However, Cyprus lacks the capital necessary for such a project on its own and when combined with stiff resistance from Turkey and the recent warming in Turkish-Israeli relations, many are wandering if the project is still feasible. Some reporters of the Associated Press have hinted recently at the possibility of reunifying ethnically divided Cyprus. While this ideal solution seems far from the picture in the near future, many observers believe that the conciliatory tone set by Cyprus’ government at the end of last year combined with talks with Turkish Cyprus beginning next month could potentially lead to greater cooperation between Cyprus and the Turkish Republic of Northern Cyprus.
Since the ousting of President cum Dictator Hosni Mubarak, Egypt has been racked by uncertainty and chaos. The most recent outing of President Mohamed Morsi and the notable crackdown on prominent Muslim Brotherhood officials and members has marginalized large segments of the Egyptian society. The Long War Journal has catalogued the disruptions to the Sinai pipeline by armed rebel groups, like the Sinai-based jihadist group Ansar Jerusalem. These pipeline attacks have cause major disruptions to an increasingly strained Egyptian economy, burdened by a worsening domestic natural gas situation and mass strikes across large swaths of the population. Israeli natural gas exports from the Eastern Mediterranean fields could provide Egypt with much needed natural gas to help quell domestic disruptions at home as Egypt attempts to quell the fears of foreign creditors.
Violence in Syria that first broke out as peaceful national protests against President Bashar al-Assad has since devolved into a full blown, proxy Civil War amongst a range of domestic and international actors (incl. the Ba’athist government and loyalist forces backed by Russia; The Syrian National Council based in Turkey; The Free Syrian Army backed by Western powers, Saudi Arabia and Qatari funding; the Islamic State of Iraq and the Levant (ISIS); Al-Qaeda affiliates; etc.). This violence and unrest has had major strains on the Syrian environs, especially neighboring countries like Lebanon. Russia has taken advantage of this situation by strategically propping up the Al-Assad regime and this past Christmas signed a gas exploration deal worth $90 with the Syrian government.
The Palestinian Authority
According to the US Energy Information Agency, The Palestinian Authority (PA) has nearly 1 tcf located in the Gaza Marine. The Palestinian Authority has been in negotiations with its Israeli neighbors about joint exploration potential. First and foremost, Palestine sees natural gas exploration as a way of increasing local autonomy. This has been difficult, however, given Israeli skepticism about negotiating with Hamas officials in the region. Given that Israel has bookmarked 40% of its gas production for exportation in recently passed legislation, Palestine may further gain from relatively cheap, stable imports from Israeli fields.
Maritime border disagreements with its Israeli neighbor remain the biggest issue for the exploration of Lebanese gas. According to a recent report by the Paris-based think tank IFRI, Lebanese maritime claims overlap Israeli maritime claims by almost 850km.UNCLOS rules – the international law of the sea – stipulates that “Cyprus’s maritime borders with Israel and Lebanon should intersect at a point equidistant from the three countries.” This has become increasingly problematic given that Lebanon has discussed as recently as last September the potential to award oil and gas exploration licenses in areas that encroach on Israel’s EEZ. The United States and Cyprus have both attempted to aid in moderating for both parties.
Russia & Europe
The EU reliance on Russian gas – nearly 30% of EU energy needs are met by Russian energy exports – has become a major concern in Brussels following the aggressive Russian annexation of Crimea. Russia’s strategic move into the Eastern Mediterranean is no secret. Kremlin-sponsored media reports highlight the high stakes potential of the development and exploration of Eastern Mediterranean fields. Russia is concerned about Europe’s energy shift towards the Southern Corridor and would prefer to maintain its dominant position over European energy needs. Syria and Israel have already welcomed Russia into the exploration and production of their respective offshore fields. Furthermore, Cyprus banks, which are already in a precarious position following the Great Recession, are flooded with Russian money – legal and illegal. These pecuniary considerations and regional security concerns give Russia important room for maneuver in negotiating regional contracts.
The issue of gas exploration and production remains a touchy subject among all regional players involved. No one doubts the huge potential lying offshore in the Eastern Mediterranean gas fields. The question now is largely a political question of coordination and logistics, rather than of functional capability. Political, economic and security concerns will have a multi-dimensional effect on the outcome of gas exploration and distribution in the region and to potentially more distant partners in Europe. Many hurdles stand in the way as each party concerned jockeys for gas exploration positioning. One thing is certain: Every player involved has skin in the game and regional security, political credibility and billions of dollars stand to be won or lost.
Derek A. Leist is a Master’s candidate in International Security at Sciences Po Paris (IEP), specializing in Energy and Global Risks. He graduated Magna cum Laude from Texas A&M University as the 2012 Browning Scholar in Economics after having studied economics at the London School of Economics (LSE) under the General Course Program. His diverse work experiences include working as a Deputy Field Officer in Houston for the Bill White For Texas gubernatorial campaign, as a summer intern for The European Movement International (EMI) in Brussels and, most recently, as a summer analyst in the Investment Management Division for the global investment-banking firm, Goldman Sachs.
 Middle East North Africa
For the sake of advancing the central thesis of this article: namely, security matters related to the exploration and drilling of Eastern Mediterranean gas, the author of this article does not take a political stand on the sovereign status or boundaries of any entity listed above, including the entity commonly referred to as Palestine or The Palestinian Territories.
 (de Boncourt, Maïté) Offshore Gas in East Mediterranean: From Myth to Reality.
 See supra note 4.