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Lebanese, Palestinian Ambitions vs. Israeli Obstacles on Gas

Lebanese, Palestinian Ambitions vs. Israeli Obstacles on Gas

Friday, 25 September, 2020 - 09:15
The Tungsten Explorer is to start drilling in its first exploration well some 30 kilometers offshore from Beirut. (AFP)

The first gas exploration works in the eastern Mediterranean basin began during the second half of the 1980s in Egypt, when the Egyptian petroleum authorities granted the operating companies equal privileges for discovering gas and oil.

Until the seventies, the wellhead would be closed when gas was discovered due to the insufficient demand. However, with the rise in oil prices since the early 1970s, gas consumption gradually increased to become the preferred fuel in electricity generation, petrochemical and heavy industries. The demand for gas improved due to its low carbon dioxide emissions compared to the emissions from oil.

Egypt attracted major international oil companies in its gas industry, such as Shell, Eni, Total, British Petroleum and British Gas, in addition to many smaller companies. Oil companies were interested in Egypt for several reasons, including the history of explorations in its vast land and waters, its exploration and development contracts, and the availability of a skilled local labor force, not to mention its local market, which employs about 100 million people.

Egypt was among the first Arab countries to install gas pipelines for domestic consumption. In 2015, Eni discovered the giant Zohr field - the largest gas field in the Mediterranean that has been found so far.

The discovery of this particular giant field, in addition to other offshore fields, helped Egypt become self-sufficient in natural gas, even for limited years (until about 2025).

Israeli Obstacles

Egypt’s exploration success in its exclusive economic zone north of Alexandria and Port Said encouraged neighboring countries to explore in the geological zone of the Nile Delta.

In 1999, the Palestinian Authority took the initiative to sign an exclusive contract with British Gas to search for oil in Gaza waters. The Gaza Marine field was discovered in 2000, with proven reserves amounting to around 1.50 billion cubic meters, which are enough to meet the demands of the Gaza Strip and the West Bank. However, Israel refused to give approval for the start of operations and the field remains undeveloped to this day.

Both Cyprus and Lebanon have adopted oil exploration policies following discoveries in the neighboring regions. Cyprus took the initiative to demarcate its maritime borders with Egypt, Lebanon and Israel.

When trying to demarcate the borders with Lebanon, an obstacle emerged, represented by the undefined borders in the north with Syria and in the south, with Israel. The maritime borders between Lebanon and Syria are not demarcated, based on a Damascus decision. On the other hand, Lebanon is at war with Israel and direct negotiations over this matter cannot take place at the current time.

Therefore, the Lebanese-Cypriot border was drawn up in a non-final way, with the stipulation in the border agreement that neither party (Lebanese or Cypriot) has the right to agree with a third party without obtaining the prior consent of the other side.

In parallel, the Lebanese government sent a memorandum to UN Secretary-General Antonio Guterres documenting its maritime borders according to international agreements and norms; but Cyprus and Israel agreed on a common maritime border between them, which led to Israel seizing control of a large area of southern Lebanese maritime blocks 8, 9 and 10.

The US is currently undertaking a mediation between Beirut and Tel Aviv to solve the problem. Indirect talks between the two sides are ongoing.

Lebanon and Cyprus divided their exclusive economic zones into maritime blocks. Lebanon divided its area into 10 blocks. One well has been drilled so far by a consortium led by French Total in Block 4. The consortium is expected to start exploration in Block 9 in the southern waters off the coast of Tire the end of the year.

Cyprus has also taken the initiative, despite the continuing Turkish threats, to implement an ambitious exploration program that has attracted a number of major international oil companies (Total, Eni, ExxonMobil, Qatar Petroleum and Noble Energy). The Aphrodite field was discovered with a reserve of about 5 billion cubic meters of gas, in addition to several other fields.

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