Egypt-Saudi Arabia maritime demarcation agreement makes headlines again - AL MONITOR

Tiran (foreground) and Sanafir (background) islands between
Egypt's Sinai Peninsula and Saudi Arabia

July 9, 2019

Rami Galal 

CAIRO — The issue of sovereignty over the two islands of Tiran and Sanafir in the Red Sea at the Strait of Tiran leading to the Gulf of Aqaba is once again making headlines in Egypt. The country had witnessed a wave of anger three years ago against the backdrop of the signing on April 8, 2016, by Egypt and Saudi Arabia of a maritime border demarcation agreement, under which Saudi Arabia gained sovereignty over the islands.

During a meeting with an Egyptian parliamentary delegation June 26, Red Sea Gov. Gen. Ahmed Abdullah revealed great gains for the Egyptian economy that are about to materialize as a result of the 2016 agreement. “A large number of people focused on the islands of Tiran and Sanafir and completely ignored the economic gains that the Egyptian citizen will gain,” he said.

According to Abdullah, Egypt has been able, after the agreement, to exploit the wealth in the Red Sea. He explained that the border demarcation agreement allows Egypt to drill in deep territorial waters because the International Law of the Sea defines territorial waters and economic waters as well as the equidistant line between countries. The International Law of the Sea does not determine the maritime borders between countries.

EGYPT PULSE Is new energy league an alliance against Ankara? - AL MONITOR

January 24, 2019
Mohamed Saied 

CAIRO — A new eastern Mediterranean alliance that includes Israel is moving to take advantage of the energy-rich region, which has natural gas reserves estimated at 122 trillion cubic feet (3.45 trillion cubic meters). Some observers say the coalition also wants to counter any efforts Turkey might make to control energy sources in the region.

The Egyptian Ministry of Petroleum announced Jan. 14 that six countries and the Palestinian Authority (PA) had agreed to establish the Eastern Mediterranean Gas Forum (EMGF), with Cairo as its headquarters. The presidents of Egypt, Cyprus and Greece had held a trilateral summit Oct. 10 on the Greek island of Crete during which they agreed to establish the forum.

Turkey began its first oil and gas exploration off the coast of Antalya by launching the drilling ship Fatih on Oct. 29.

Jordanians really don't want Israel’s gas - AL MONITOR

March 29, 2017

Mohammad Ersan; translated by Pascale el-Khoury

AMMAN, Jordan — 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. Those against the contract are calling on the parliament to reject it. 

Houston-based Noble Energy holds the concession for developing Israel’s largest offshore gas deposit, the Leviathan natural gas field, 50 miles off the coast of Haifa in the Mediterranean. The agreement, expected to enter into force in 2019, has sparked demonstrations because many Jordanians view it as tantamount to normalization with Israel. According to the GSPA, Jordan will import 300 million cubic feet of gas per day from the Leviathan field for 15 years at a cost of $10 billion. Noble has a nearly 40% working interest in the field, while Israeli companies hold the rest.

What's in store for Lebanon's nascent oil, gas sector? - AL MONITOR

Men look at screens onboard a boat during a tour of areas believed
to have gas reserves off Lebanon's coast near Beirut, May 30, 2013
(photo by REUTERS/Mohammed Azakir)

There is a new debate brewing in the small circles that discuss the best governance practices for oil and gas in Lebanon. While the caveats made Fouad Makhzoumi sound reluctant, he picked a side. The owner of a pipeline design and manufacturing concern, Makhzoumi wears his political ambition on his sleeve. He has run for elected office before and lost, but seems to be gearing up for another battle.

Author Matt Nash, May 27, 2016

At a live broadcast of a May 26 forum focusing on Lebanon’s oil and gas potential, which he co-organized, Makhzoumi urged attendees and those watching at home to support the country’s oil and gas regulator. Makhzoumi admitted that he first assumed the regulator’s six-member board was staffed with political appointees beholden to the sectarian leaders that chose them. Visiting their offices to see them in action, however, convinced him they were doing serious work, he said. He added that it’s best to just stick with the system in place, which was established nearly six years ago, for now.

Israel takes advantage of Arab delay over gas | Al Monitor

An Israeli naval vessel sails in the Mediterranean Sea near the border with Lebanon, Dec. 16, 2013; Mount Carmel and the Israeli city of Haifa are in the background. (photo by REUTERS/Amir Cohen)

Israel takes advantage of Arab delay over gas

A seminar titled “Petroleum Resources in the East Mediterranean: Economic, Political & Security Concerns” was held last week in Beirut under the patronage of the Lebanese army’s Research and Strategic Studies Center and the Lebanese Petroleum Administration.

Summary



As Israel reaps the benefits of natural gas available in the region, Arab countries lag behind in discoveries and agreements.

Author Walid Khoudouri
Posted September 28, 2014
Translator(s)Pascale el Khoury

Original Article اقرا المقال الأصلي باللغة العربية

The conference tackled the topic of geopolitical factors that emerged with the discovery of natural gas in the eastern Mediterranean, especially in light of the harsh political crisis in this region due to wars. [The conference also addressed] the lack of demarcation in the maritime exclusive economic zones (EEZ) before the start of discovery operations, not to mention the war hazards to offshore rigs.

There is no doubt that most of the petroleum activity in the world has been accompanied by political disputes arising from conflicts of interests. The eastern Mediterranean region does not differ in this regard. However, some differences can be found in the details and the nature of the conflict between one region and another, which is why the geopolitical variables of the eastern Mediterranean region are relevant. They include, for the first time in the history of the Middle Eastern petroleum industry, an Israeli interference in the Arab energy industry. Israel has taken over Arab oil fields; it occupied and exploited Egyptian oil fields following the occupation of Sinai after the 1967 war. It subsequently returned those fields to Egypt in return for the Camp David Treaty and the United States’ pledge to provide [Israel] with oil in the event of supply disruptions.

Moreover, Israel imposed its influence on the discovery of natural gas in the Gaza Marin field in Palestinian territorial waters off the coast of Gaza. Ever since the discovery of gas in 2000, Israel has banned the development of the field and any supply to Gaza's power station. Israel also imposed on the [Gaza] Strip the importation of fuel exclusively from Israeli companies, which made the Palestinian Authority incur heavy financial losses, not to mention the halt of supplies when political disputes arise. Undoubtedly, the frequent wars on Gaza are in part an attempt by Israel to sustain the ban of development of the oilfield.

The current geopolitical situation of eastern Mediterranean gas differs from the earlier situation when Israel occupied oilfields. Israel discovered gas reserves that meet its domestic consumption for decades, which prompted the Israeli government to adopt a policy allocating 60% of the reserves of each gas field to domestic consumption, with the possibility of exporting the rest to international markets.

The most important global markets for natural gas imports are Asian countries, followed by the European countries, in addition to the countries of the Middle East that have high economic growth and population increases. The US market, deemed the most important market worldwide until recently, is contenting itself with its own local gas resources following discoveries of shale gas. Thus, eastern Mediterranean gas — in the event of the discovery of adequate quantities allowing exportation after meeting domestic demand — will cater to the needs of Middle Eastern and European countries.

Natural gas export trade has not witnessed any development between Arab countries. The reasons are many, including the lack of an approved price formula for regional gas trade. European states adopt a price formula for imported natural gas based on comparing the price of gas with the prices of equivalent petroleum products. Asian countries have set the price of imported liquefied natural gas (LNG) compared with a price equivalent to the price of imported crude oil in Japan. The lack of a regional pricing formula led to the use of political influence by the importing countries over the exporting countries to impose low prices.

There are very few gas trade agreements between Arab countries, including the Dolphin Gas project for the export of Qatari gas to the United Arab Emirates and Oman; an agreement to export Egyptian gas to Jordan, which is currently subject to amendments after supply disruptions due to the bombings that targeted a pumping station in El-Arish; and the export of Iraqi gas to Kuwait during the 1980s.

Further contributing to the blocking of the Arab-Arab gas trade are agreements imposed by influential countries in countries the gas pipelines pass through. Agreements were changed according to the [influential countries'] circumstances rather than abiding by the agreed-upon obligations. They sometimes halted exports whenever a political dispute broke out between them and the exporting or importing state, or disrupted the whole pipeline network whenever required.

Israel benefited from its fast decision-making process to start discoveries and succeed. This prompted it to hold negotiations on exportation to regional and European markets. Negotiations are currently underway between companies, but obtaining a final approval requires the consent of states. The consortium of companies (US Noble Energy and partner Israeli companies) operating in Israel's giant Leviathan gas field suffers from shortage of financial liquidity for the development of the field, which cost $6 billion. The consortium tried to attract international companies to cut down costs, but did not succeed. It resorted to the signature of sale and purchase contracts with regional countries.

A need to buy gas arose among some regional countries. The cessation of Egyptian exports forced Jordan to seek out alternative gas supplies. There are now attempts to import LNG, either through Aqaba or by importing Israeli gas. There are challenges facing the Egyptian gas industry that transformed Egypt from an exporter to a net importer of gas within two years. Egypt is negotiating with Algeria, Qatar and Cyprus to import LNG, but the agreement with Qatar is unlikely in light of differences between Cairo and Doha.

In light of these developments, a memorandum of understanding was signed between Noble Energy and British BG oil and gas company to supply the LNG terminal in Idku, in addition to a memorandum with the Spanish Union Fenosa Company operating the gas liquefaction plant in Damietta. Another memorandum was signed with the Jordanian Electric Power Company (JEPCO).

The United States supports the ongoing negotiations since such relations would lead to normalization. Memorandums of understanding between companies require the approval of the concerned governments, and this has yet to happen. Egypt and Jordan are negotiating with other sources to fulfill their gas needs. The final decision depends on the price and volume of supplies.

Negotiations between Turkish and Israeli companies to export gas to Turkey are ongoing but intermittent in light of worsening Israeli-Turkish relations. There are also projects proposed by European companies to build a gas pipeline through Cyprus and Greece and connect it to the European gas network. However, some of the projects that are being negotiated indicate that Israel is attempting to tap into local markets.

Link to source: http://www.al-monitor.com/pulse/business/2014/09/httpalhayatcomopinionwalid-khadouri4688395--.html#

Mediterranean gas not yet the answer for Turkey's ties with Israel, Cyprus | Al Monitor

US Vice President Joe Biden, on his recent visit to Cyprus, showed the importance the White House is placing on finding alternate energy routes into Europe for the newly discovered deposits of hydrocarbon reserves in the Eastern Mediterranean in an attempt to loosen Europe’s dependence on Russia.

Summary Michael Leigh of the German Marshall Fund argues the newly discovered hydrocarbon reserves in the Eastern Mediterranean are not agents of peace, but if a political settlement were achieved, both with Cyprus and Israel, these reserves could reinforce the peace with Turkey.

Author Tulin Daloglu Posted May 28, 2014

Biden’s May 21 arrival on Cyprus marked the most senior US official visit to the island in more than five decades.

Turkish Foreign Minister Ahmet Davutoglu called Biden’s meeting with Turkish Cypriot President Dervis Eroglu a “historic step,” providing ample encouragement for a fair and just settlement of the Cyprus issue. “Biden’s message, which demonstrates an equidistant approach to the parties, is positive, according to us,” Davutoglu said May 23.

To what extent will the discovery of gas in the Eastern Mediterranean play a role in progress on the Cyprus problem, or on efforts toward a Turkish-Israeli reconciliation? After all, Israel’s Leviathan and Tamar offshore natural gas fields are greater in amount and depth than Cyprus’ Aphrodite and Block 12 reserves.

The underlying assumption is twofold: that Turkey will, for the foreseeable future, have a ferocious demand for gas to feed its economy, and that Turkey envisions itself as an energy transit hub between Central Asia, the southern Caucasus and Europe. In this context, the Eastern Mediterranean gas is very attractive to Turkey, regardless of its amount and regardless of whether it could really provide an opportunity to free Turkey from dependence on Russian and Iranian imports.

Michael Leigh, of the German Marshall Fund and a former EU Commission director-general for enlargement, told Al-Monitor, “This assumption can be challenged on economic grounds before you come to any political issues which are at stake.” Leigh wondered whether Turkey would position its policy on these highly political questions regarding the hydrocarbon deposits in Cyprus and Israel.

Leigh began his argument questioning Turkey’s future demand for gas. “This very much depends on the growth rate of the Turkish economy. Certainly, if you project the kind of growth rates that Turkey has enjoyed over the last decade, you might conclude that Turkey needs to add to its energy supply from any sources whatsoever,” he said. “However, growth has now slowed down tremendously in Turkey. It is very hard for us to project forward and to know what that demand will be in the future.”

Turkey has a number of other sources of gas that are far greater in scale than what might ever be available in the Eastern Mediterranean, said Leigh, with Russia at the top of the list. “Of course, Turkey has an interest in the European Union diversifying away from Russia to some degree,” he said. “But there is no way the Eastern Mediterranean (gas) could make a significant dent in the 60% of gas Turkey is currently buying from Russia. Also, Turkey can look to Azerbaijan and to Iran as important sources of gas.”

Leigh also puts a big question mark over the price issue. “It is still too early to say what price either Israel or Cyprus will be ready to sell gas to Turkey. But costs in Eastern Mediterranean are rather high,” he said. “And it is very far from certain that Turkey will be ready to pay the price that the companies in the Eastern Mediterranean would need to get a decent return on their investment. There is all that by way of uncertainty.”

A prominent source in the Turkish Energy Ministry said Turkey is not concerned a bit about any of the above. “There are not enough deposits of hydrocarbons in the Aphrodite gas field or Block 12, but the Greek Cypriots remain hopeful for coming up with new discoveries. Speaking for now, though, it is not feasible for any investor to spend the money on infrastructure to bring the hydrocarbons to the surface,” the official told Al-Monitor.

“To us, it is their problem whether they find additional reserves or whether they want to export these hydrocarbons at any given time. If they do want to export them, however, it is clear that Turkey is the best route and therefore they will realize that it is also in their best interest to find a justly negotiated settlement of the Cyprus issue.” He added, “When their politics come to this realization, we will be happy to sit down and talk about it in detail.”

So far, the scale of discoveries in Cyprus has been considerately below expectations, making an investment for a floating liquefied natural gas (LNG) plant out of question. Leigh said that Noble energy, TOTAL and ENI are drilling to find new gas deposits, and stressed that building floating LNG plants is a costly investment. “For an LNG plant to be commercially viable it needs two trains (liquefaction facilities). … One train LNG plant costs $6 billion. Two trains cost $9 billion and three trains cost $12 billion,” Leigh said. “And to get a good economic return, you really need these two (trains). So, the court is out as to whether Cyprus is going to find sufficient quantities in order for the export options to be viable. The other main idea as to how Cyprus could have enough quantity to justify export infrastructure is by joint monetization with Israel, which has been discussed a great deal. The Cypriots hope very much that the Israelis will agree that the gas from the Leviathan field that should be on stream in 2017 should be sent to Cyprus.

"And if you pull Cypriot and Israeli gas (together), there will then be sufficient quantity that will interest energy investors. Until now, Israelis have shown no interest in this. Their famous report from an intergovernmental committee — now a year and a half ago — strongly advises that Israel should retain the control of its own gas. And maybe much further down the road, people may think about this.”

Leigh was highly doubtful whether Turkey would be moved to take a more forthcoming position on the Cyprus question due to energy issues, especially with Turkey's prospects for other energy imports.

As for Israel, although there is word in the Ankara beltway that Turkey’s Energy Minister Taner Yildiz is courting Davutoglu for a speedy reconciliation with the Jewish state, all bets seem to be going south, making normalization an unrealistic expectation for now. Further signaling that all bets are off, on May 26, an Istanbul court ordered the arrest of four former senior Israeli military officers who the court believes are ​directly responsible for the deaths of 10 Turks who were aboard the Mavi Marmara in May 2010. This political conundrum certainly prevents the energy talks from moving forward between the two countries. Yet, there is no doubt that the pipeline from Israel to Turkey will be much less expensive than a floating LNG plant.

“Because of the hostility of the Turkish government to Israel, Israelis would not want to put all their eggs in the same basket in exporting its gas. What happens if Turkey does what Russia did, like turning off the tap one day?” Leigh said. “Talking to senior officials in Israel, they seem to take the view: If Turkish companies are ready to make the investment, run the risk, they are not going to block it.”

Israel’s immediate priority seems to be exporting to neighboring countries such as Jordan, Palestinian lands and, possibly, Egypt. In other words, the companies concerned are far from decided whether exporting to Turkey is feasible.

Leigh said there are two possible routes for a pipeline from Israel to Turkey. One is from Israel through the Lebanese Exclusive Economic Zone (EEZ) and the Syrian EEZ, and the other is through the Cyprus EEZ. “As far as the law of the sea is concerned, a coastal state does not have the right to veto a pipeline passing through its EEZ, but it has to approve the route that the pipeline takes. So, de facto it provides a veto,” Leigh said.

This means that Lebanon and Syria have de facto veto rights on Israeli gas exports to Turkey. It looks unlikely for now that companies would run the risk of this route, given events in Syria and Lebanon. Therefore, the Cyprus EEZ route would be the only route they would consider, and the Cyprus government would have to approve.

In sum, Leigh does not consider the new hydrocarbon reserves to be an agent of peace-building efforts in the region. “If there is a political breakthrough, either on Cyprus or on Israel, the energy cooperation can reinforce it. … Clearly, the pipelines will create a new common interest, but it is not the motive (to enforce these countries to settle their score and finally make peace). Once they settle their political differences, it will reinforce the peace,” he said.

According to Leigh, the more convincing reason as to why Turkey might be interested normalizing its relations with Israel is the following. “When relations between Israel and Turkey were close, there was a tremendous area of military cooperation. The Israeli air force had used Turkish airspace for its exercises, and they in return provided transfer of military technology,” Leigh said. “Now, Israel has switched its military cooperation to Cyprus and Greece. Turkey and Greece still have their issues, and, obviously, the Cyprus issue is unresolved. This is a much greater national security threat to Turkey than this energy issue.”

Even if this is the case, in the words of an Israeli diplomatic source, “Turkey is quite an unpredictable partner for us under (Prime Minister Recep Tayyip) Erdogan’s leadership, and we have no interest to be part of Turkey’s domestic politics, at least up until the presidential elections in August. We will see what comes after then."

Link to source: http://www.al-monitor.com/pulse/originals/2014/05/eastern-mediterranean-gas-cyprus-greek-cypriots-biden.html

US Tries to Mediate Lebanon-Israel Maritime Border Dispute | Al Monitor

Official Israeli circles said that the Lebanese government is in the process of granting licenses to explore for oil and gas in a Mediterranean region that Israel claims as part of its exclusive economic zone (EEZ).

SUMMARY Israel claims that Lebanon is planning to grant gas exploration licenses in a disputed area, while the United States is working to mediate a solution.

Helmi Moussa, October 2, 2013

With that announcement, the Israeli-Lebanese dispute over their maritime border is out in the open, despite news that US mediation had achieved great successes in resolving that issue.

The subject of oil and gas in the eastern Mediterranean was a main meeting topic between Israeli Prime Minister Benjamin Netanyahu, who visited Washington on Oct. 1, and US Vice President Joe Biden, who is handling that issue. The results of that meeting have not been announced.

Official Israeli sources informed the Globes economic newspaper that Lebanon is trying to impose facts in disputed areas between Lebanon and Israel. Thesources pointed out that “Lebanon is about to award offshore oil and gas exploration licenses in areas that encroach on Israel’s EEZ.” Globes said that it is not yet known how Israel will deal with those licenses, which may spark a border dispute with Lebanon.

Israeli international law experts are urging their government to quickly announce its objections to the Lebanese moves either legally or militarily.

At the beginning of September, Lebanon announced its intention to grant tenders for licenses to explore for oil and gas in five blocks in Lebanese waters. But Israeli experts who analyzed the coordinates on the Lebanese map “discovered” that the southmost area to be licensed, Block 9, is in Israeli waters. The newspaper said that this area is the most attractive and the most likely to yield significant gas discoveries.

The official responsible for oil in the Israeli Ministry of Energy and Water, Alexander Varshavsky, presented his analysis at an international oil conference in Cyprus two weeks ago. He said that Israel has refrained from taking a similar step and has not granted licenses to explore for oil and gas in the disputed area.

The dispute between Israel and Lebanon is over the maritime demarcation line separating two EEZs. Both sides agree that Ras al-Naqoura lies on the common land border. But they disagree on the angle of the line drawn from Ras al-Naqoura toward the Cyprus EEZ. The disputed area is 850 square kilometers [528 square miles], in the shape of a triangle.

In 2010, Lebanon presented a map of its maritime boundaries to the UN. Israel did the same for its borders a year later. The map signed by Lebanon, Israel and Cyprus is the basis of the dispute. The United States is trying to get the parties to resolve the dispute peacefully.

Israeli border expert David Kornbluth said that Israel may lose its claim on the disputed area if it does not respond to the Lebanese move. “Judicial practice says that the state that doesn’t object to such a step is considered to have withdrawn its claim.”

To assert Israel’s claim, he called for naval patrols in the area, issuing a formal communication, requesting that a third country mediate and informing international companies that participate in the bidding licenses that this area is disputed. It is known that dozens of international companies, most of which refuse to deal with Israel, fear for their interests in the Arab region and are making bids to Lebanon.

On the other hand, it was learned that US Vice President Joe Biden delayed his speech to the Jewish American J Street organization by an hour and a half because he was meeting with Israeli Prime Minister Benjamin Netanyahu. The meeting took place at the White House in the presence of US Secretary of State John Kerry, after Netanyahu’s meeting with US President Barack Obama. US media barely mentioned the meeting, but some considered it more important than Netanyahu’s meeting with Obama. The meeting with Biden was about the oil and gas fields in the eastern Mediterranean. Kerry and Biden are focusing US efforts in this regard.

It is obvious that this is not only about Lebanon and Israel. The US strategy for the eastern Mediterranean gas discoveries is related to Turkish, Cypriot and Greek relations, and the relations between them and Israel as well as Lebanon. A US strategy developed by the Marshall Institute and adopted by the US administration is based on exploiting the gas issue to conclude political settlements and resolve the disputes between countries in the region. The strategy calls for a gas pipeline from Israeli and Cypriot fields to Turkey, and that Lebanon can later benefit from the pipeline after it starts extracting gas.

In that context, Biden met with the Cypriot president last week after he met with the Turkish prime minister a month ago. Cypriot newspapers said that these moves were aimed at resolving the conflict between Turkey and Cyprus over their EEZs and gas fields.
ORIGINAL ARTICLE اقرا المقال الأصلي باللغة العربية
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