Discovery of Energy Reserves in the Levant and Impacts on Regional Security/Levant'da Enerji Kaynaklarinin Kesfi ve Bolgesel Guvenlige Etkileri.

• Author: Winrow, Gareth M.
• Position: Report

Introduction

Much attention has recently focused on the discovery of a number of gas fields in the eastern Mediterranean. Questions have been raised over whether these new energy reserves will create incentives to improve relations between states in the area and help promote regional cooperation, or will they contribute to the exacerbation of tensions in the eastern Mediterranean. If governments continue to disagree over the demarcation of maritime boundaries and fail to support projects, which would entail the laying of pipelines through their exclusive economic zones (EEZs), much of the gas and oil reserves will remain unexploited. Frustration over the inability to monetize energy resources could then worsen ties between states in the area. On the other hand, cooperation between states over energy issues could boost struggling economies as well as ease political tensions.

This paper will explore these issues with particular reference to energy resources in the Levant Basin Province and surrounding areas in the eastern Mediterranean. In this context, the nexus between energy and foreign policy concerns is discussed. It is important to note, though, that matters relating to energy have their own separate set of dynamics and that the role of energy companies, for example, needs to be considered. The paper will examine the attempts by governments in the region and beyond to boost cooperation by encouraging energy projects, thereby seeking to enhance regional security. However, geopolitical tensions in the area, especially over Cyprus and Israel's relations with its Arab neighbours, put at risk the realization of these projects.

Energy and Foreign Policy

The close connection between energy issues and foreign policy interests has been ably demonstrated by Correlje and van der Linde in their presentation of two possible storylines. (1) According to the "regions and empires" storyline, a neo-realist view of international relations prevails in which states emphasize the significance of geopolitical concerns and energy companies follow the policy line of their home governments. In contrast, the "markets and institutions" storyline depicts international relations within a neo-liberal framework in which functioning markets and effective institutions play key roles and the priority of energy companies is to make profits. In the case of the eastern Mediterranean, arguably features of both of these storylines are observed.

Proponents of the notion of "economic peace", such as Bijaoui, contend that economic interdependence between states promotes peace and prevents conflict. (2) In line with this argument, economic development through the exploitation of energy resources may help overcome political hurdles and ease tensions between states. In the Obama administration, the United States (U.S.) Special Envoy and Coordinator for International Affairs, Amos Hochstein, in effect promoted "economic peace" by pursuing a policy of encouraging governments in the eastern Mediterranean to cooperate in the energy field to provide incentives to bolster political accommodation. (3) Problems of high unemployment, economic stagnation and the financial difficulties of states in the region provided further reasons for governments to engage in political compromise and work together to benefit from the consumption and sale of energy resources. Given their recent economic difficulties, the benefits for governments in the eastern Mediterranean could be substantial if energy reserves are developed and exported to potentially lucrative outside markets. However, a number of technical, legal, political and commercial issues would first need to be addressed before energy projects may start to be implemented, and profits and transit fees secured.

The deep-rooted political problems in the eastern Mediterranean may prevent the realization of an "economic peace" in the area. For example, there is an apprehension, especially among Arab governments and peoples, that Israel could use its newly discovered energy reserves to create an "infrastructure of dependency" in the region and hence consolidate the current status quo, which is perceived to be in Israel's favour. (4) Under the Trump administration, Hochstein's replacements as Acting U.S. Special Envoys have been much less active in the eastern Mediterranean as Washington follows an "America First" policy.

Schaffer has argued that there is no evidence that energy can bring peace in regions of tension and conflict. Cooperation between states over energy resources may only occur after governments begin to improve relations. Companies rarely operate in zones of conflict and banks are unlikely to fund investments in areas of tension. The construction of pipelines across state borders only commences after the signing of intergovernmental agreements. (5) Other commentators have noted that when states have "deeply securitized political relations", energy issues are more likely to heighten tensions, and in such circumstances, energy may be used as a political weapon. (6)

On the other hand, an improved political environment does not mean that certain energy projects will automatically be realized. Governments do not build pipelines. Energy companies, funding agencies, and regulatory bodies play a crucial role. Projects require financing, technical knowhow, and often need to meet certain environmental standards. Usually, projects will not receive the go-ahead if they are deemed to be economically unviable. In effect, a series of benchmarks needs to be met before energy projects are approved and implemented. Producers need to have access to a market. The export of oil or gas to outside consumers may require the approval of certain transit states, and here again political problems may obstruct or delay projects which have been recognized as commercially feasible. Politics alone will not result in the realization of energy projects. However, some measure of cooperation between governments is required before companies start to build pipelines and other energy infrastructure.

Energy in the Levant

According to a U.S. Geological Survey published in 2010, the Levant Basin Province is a geological structure, which covers 83,000 square kilometres of the eastern Mediterranean. The basin extends over parts of the maritime areas of the island of Cyprus, Egypt, Israel, the Palestinian Territories, Lebanon, Syria and Turkey. The survey estimated that the Levant Basin Province held undiscovered reserves of 1.7 billion barrels of recoverable oil and around 122 trillion cubic feet (about 3,420 billion cubic meters [bcm]) of recoverable gas. (7) These estimates were announced before the discovery of significant volumes of gas in Egyptian and Israeli offshore fields.

There are in total eight energy basins in the eastern Mediterranean. Until recently, most hydrocarbon production in the eastern Mediterranean was concentrated in the Nile Delta Basin, the West Arabian Province, and the Zagros Province. A report published in 2013 noted that the energy reserves of the eastern Mediterranean as a whole represented less than one per cent of the world's total proven reserves of oil and natural gas. (8) However, these resources are potentially important sources of revenue for states in the region. In addition to providing the means of energy to power the expanding economies of states in the eastern Mediterranean, gas in particular may be exported to neighbouring markets in Europe.

Although in geological terms the eastern Mediterranean is divided into a number of separate basins of which the Levant Basin Province is only one part, the area as a whole is closely connected politically and economically and the production, sale and consumption of oil and gas in the region will in many cases require cooperation between various governments. Given that most attention has recently focused on the discovery of large gas fields in the eastern Mediterranean, this paper will concentrate on the possible impact of gas extraction on regional security.

In late 2011 the American company Noble Energy announced that it had discovered substantial volumes of gas in the offshore Aphrodite field to the south of Cyprus. The field is estimated to hold recoverable reserves of approximately 120-129 bcm. (9) Together with its partners, Shell and the Israeli companies Delek Drilling and Avner Exploration, Noble is aiming to commence production in 2020 or shortly after, once markets have been identified and pipeline connections laid. Two larger gas fields have been recently discovered in the Levant Basin Province in Israeli waters. The Tamar field, which has reserves of about 318 bcm, has started operations and is delivering gas to the Israeli mainland and to Jordan. (10) Noble is also the operator of this field in a consortium with several Israeli partners. The Leviathan field has reserves of approximately 605 bcm. (11) Noble and the Israeli companies, Delek and Ratio Oil Exploration, are planning to begin production by the end of 2019, but major export deals with states in the region have yet to be concluded.

There are also unexploited gas reserves in the waters off Lebanon, Gaza and Syria. Offshore Lebanese blocks may hold 660 million barrels of oil and 849 bcm of gas. (12) The offshore Gaza Marine has an estimated 28.3 bcm of gas. (13) Although small, these reserves would provide a guaranteed source of energy for the one power plant in Gaza. Prior to the outbreak of hostilities, Syria was a significant producer of oil and gas. However, in 2015 the Russian firm Soyuzneftegaz pulled out of a $90 million deal to drill for oil and gas in Syrian waters on account of the risks associated with the on-going conflict. (14)

The discovery by ENI in 2015 of substantial reserves of gas in the offshore Egyptian Zohr field in the Shorouk Block in the Nile Delta...