Israel and Cyprus Forging Ahead on Gas Bonanza

August 11, 2011

As Israel revealed that it has begun to deploy drones to protect its Mediterranean gas fields from attack by Hizbullah, plans are reportedly underway to jointly develop the huge gas reserves with Cyprus.

“We are currently working on a unitization agreement that will determine how we can develop joint gas and oil reserves for facilities that are located on both sides of the demarcation line,” Cypriot ambassador to Israel Dimitris Hatziargrou was quoted as saying in the economic daily Globes.

“The energy matter is new for us, but we intend to investigate all the possibilities, including cooperation between Cyprus, Israel and Greece,” he said.

Earlier this year, Israel and Cyprus agreed to equally divide the 250 kilometers (155 miles) of water that separates them. Last month Israel unilaterally drew the maritime border with Lebanon, all in an effort to lay claim to the natural gas spoils.

The United States Geological Survey last year estimated that more than 122 trillion cubic feet of recoverable gas reserves lie under the waters of the eastern Mediterranean, most of it within Israeli territory. Since then, some 16 trillion cubic feet of natural gas reserves have been tentatively added from the giant Leviathan field offshore from Israel.

The Israeli fields lie adjacent to Cypriot and Lebanese waters and are part of the so-called the Messinian layer, a formation of salts and mineral deposits that promise even more gas discoveries to come. Houston’s Nobel Energy, which is a partner in three Israeli gas fields including Leviathan, also holds 100% of the yet unexplored Cyprus A field called Block 12 about 65 kilometers away.

The fields are so mind-boggling large that plans are afloat to team up in order to seek investors. An official at Israel’s Ministry of National Infrastructure confirmed reports that its director general Shaul Tzemach had been promoting an initiative for Israel and Cyprus to run a joint campaign to attract American investors for developing the natural gas fields.

“This is an idea that has been raised, but we don’t know of anything concrete at the moment,” an official at the ministry told The Media Line.

Ambassador Hatziargrou added that Block 12 and Leviathan “are very close to each other, which makes it economical to cooperate on this project. There have been discussions and good intentions, however serious talks will begin only after we know for sure that there is gas.”

Nobel announced last week that it would commence hydrocarbon drilling off Cyprus by October.

“It could be that we could propose joint ventures for gas exploration in the areas controlled by both countries. It is obvious that this would be a better package if done in cooperation with Cyprus and Israel. There would be greater chances of success,” Doron Peskin, head of research at Info-Prod Research (Middle East) Ltd., told The Media Line.

Peskin also noted that the potential goes beyond Cyprus. Greece could be involved too, he said. As EU states, they could also be a distribution point for Israeli gas to Europe.

The entire notion of gas exploration in the eastern Mediterranean is politically explosive as each of the countries in the basin seeks to demarcate their maritime exclusive economic zone (EEZ) border. When Israel and Cyprus declared their EEZ, Turkey raised its eyebrows since it, too, has claims stemming from Turkish-occupied northern Cyprus.

While Lebanon has been riven by factionalism, attempts a few years ago by Lebanon to demarcate its maritime borders with Cyprus drew a blunt threat from Turkey to back off. Beirut did, but with the possibility of huge gas finds, the matter has been revived. The prime minister of Lebanon is reportedly going to Ankara soon and one of the issues likely to be raised is this maritime agreement with Cyprus.

Meanwhile, Lebanon’s Parliament last week approved a draft law unilaterally demarcating maritime borders with Israel. According to the United Nations, the borders overlap with both countries unilaterally claiming some 850-square kilometers.

Israel dismisses Lebanon’s claims out-of-hand, saying they are politically motivated and reflect the influence on the government of Hizbullah, the Lebanon-based Iranian proxy Shiite Islamist group that fought Israel in a month-long war in 2006 and maintains its own arsenal and army of fighters. But Israeli officials are concerned about the vulnerability of gas installations to missile attacks like those Hizbullah staged in that war.

This week, the Israeli air force confirmed that it has begun dispatching unmanned aerial vehicles (drones) to conduct round-the-clock surveillance and reconnaissance missions over the Israeli gas installations.

Source: All Headline News (AHN).
Link: http://www.allheadlinenews.com/articles/90056852.