Russia seeks opportunities for Israel, Syria, Cyprus, Lebanon and Gazza offshore gas fields on Mediterranean

UPI

Palestinian Authority President Mahmoud Abbas is in Moscow on a four-day visit seeking to secure a $1 billion deal with Russia to develop a natural gas field off the Gaza Strip.

The move would expand what appears to be a determined Russian push into the energy-rich Eastern Mediterranean, Russian media reports indicated.

Russia signed a 25-year agreement with Syria's embattled regime Dec. 25 that gives Russia's state-controlled Soyuzneftegaz exclusive exploration, development and production rights over 850 square miles of Syrian waters, Moscow's first real foothold in the booming Levant Basin.

The U.S. Geological Survey reported in 2010 that the basin, which covers Syria, Lebanon, Israel, Cyprus and the Gaza Strip, contains at least 123 trillion cubic feet of recoverable gas and 1.7 billion barrels of oil.

The Syrian deal gives Russian President Vladimir Putin a way into a region whose resources have barely been tapped and is becoming a strategic energy source that will transform regional economies and open up new supplies of natural gas to Europe.

Moscow also is maneuvering to get a stake in the gas bonanza in Israel.

The Jewish state began production at its Tamar field off Haifa, with reserves of 8 trillion cubic feet, March 30 and the much bigger Leviathan field is scheduled to go onstream in 2017.

Interview with Dr. Charles Ellinas and Mr. Solon Kassinis, Cyprus National Hydrocarbons Company (KRETYK)

Karen Ayat*       Natural Gas Europe

Natural Gas Europe was pleased to have an opportunity to interview Dr. Charles Ellinas, Chairman of the Cyprus National Hydrocarbons Company (KRETYK) and Mr. Solon Kassinis, Vice President of KRETYK at the 2nd Annual Cypriot-Greek Oil & Gas 2013 Summit” organized by IRN in the southern coastal town of Limassol

How mighty is Aphrodite?

SK: Aphrodite'’s proven reserves are estimated at 7tcf. We are planning to have another verification well starting in June  We expect to find 10 tcf at least.

CE: There is a lot of gas already proven and we are certain there is a lot more to be discovered in the 6 blocks already awarded, probably 4 to 5 times as much as Aphrodite. 

How will future oil and gas production, once discoveries are confirmed, contribute in enhancing Cyprus'’ economy and reducing its energy bill? 

SK: Within the 13 blocks in Cyprus’ EEZ, we do envisage to have around 60 tcf. We rely on this gas given that Cyprus’ economy is now in a very bad shape.

CE: We expect that Cyprus will start construction in 2016 creating thousands of jobs as a result. The services and supplies industries will benefit as well as subcontractors. A liquefied natural gas terminal in Vassilikos will be ready to deliver natural gas to the Cypriot market by the end of 2018 reducing electricity prices by at least 50% (the price for electricity is very high in Cyprus), whereas by the end of 2019 Cyprus will be in a position to export liquefied natural gas. By 2025 Cyprus and the Levantine Basin will be able to produce 25 million tones of natural gas per year and cover 50% of the EU’s additional energy needs.

Interview with Dr. Theodore Tsakiris, Assistant Professor, Geopolitics of Hydrocarbons, University of Nicosia, Cyprus

Karen Ayat*       Natural Gas Europe

Interview with Dr. Theodore Tsakiris, Assistant Professor, Geopolitics of Hydrocarbons, University of Nicosia, Cyprus 

Natural Gas Europe was pleased to have an opportunity to interview Dr. Theodore Tsakiris, Assistant Professor, Geopolitics of Hydrocarbons, University of Nicosia, Cyprus, at the 2nd Annual Cypriot-Greek Oil & Gas 2013 Summit” organized by IRN in the southern coastal town of Limassol.
How realistic is the hoped-for resources boom in Cyprus?

What we have known since December 2011 is that Aphrodite contains a sizable volume of high quality natural gas between 5-9 tcf with a gross mean average of 7 tcf (trillion cubic feet). The appraisal or confirmatory drilling on Aphrodite, which will be completed by September 2013, will give us an accurate estimate of the exact size of the field, its extractability and its quality. There is a 50% probability that the size of the field is at 7 tcf, a 25% probability that it will be at 5 tcf and another 25% probability that it will be at 9 tcf.  In addition to Aphrodite Noble has recently announced plans to explore a second area within Block 12 were seismic data analysis indicates the existence of another promising play capable of containing 3-5 tcf. Exploration drilling will begin in this second Block 12 play over the first four months of 2014. The greatest challenge of course is ahead and relates to the results of the exploration programme set out for 2014-2016 by ENI/Kogas and Total. Cypriot authorities appear confident that the exploratory programme will result in discoveries even greater than Aphrodite.

How much gas is needed to justify the commercial viability of the Vassilikos LNG plant?

We need around 8-9tcf to justify the lengthy and costly project of building the Vassilikos LNG plant. If the appraisal drilling confirms that Aphrodite contains 7tcf it would also be marginally viable to proceed with the LNG terminal without the need for additional discoveries.

Cyprus seeks to speed up EEZ demarcation with Lebanon

The Daily Star Lebanon

BEIRUT - Cyprus Energy, Commerce, Industry and Tourism Minister Giorgos Lakkotrypis said Thursday his country was seeking to increase its cooperation with Lebanon in gas and oil exploration, adding that the demarcation of the Exclusive Economic Zone should be pursued rapidly.

The minister, who held talks with President Michel Sleiman, caretaker Prime Minister Najib Mikati and caretaker Energy Minister Gebran Bassil, is trying to expedite the demarcation of the joint maritime border between Lebanon and Cyprus to avoid any future conflict.

According to sources, Lakkotrypis is also trying to find a solution regarding the disputed maritime border between Lebanon and Israel. The disputed waters cover an area of 850 kilometers.

Lebanon has sought the help of the U.N. and U.S. to determine its actual share in this disputed zone. But the mediation efforts between Lebanon and Israel have not produced any results, according to observers.

Lakkotrypis described his talks with Lebanese officials as very productive, noting that both sides were keen to increase cooperation in gas exploration.

He added that Cyprus and Lebanon have reviewed ways to explore the joint gas wealth off the coast.

Trouble in the Eastern Mediterranean Sea

Yuri M. Zukov*       Foreign Affairs

The Coming Dash for Gas 

In recent years, resource disputes in the South China Sea have made headlines across the world. But another body of water -- the Mediterranean -- is rapidly becoming as volatile as its eastern cousin. Exploratory drilling near the coasts of Cyprus, Egypt, Israel, Lebanon, Syria, and Turkey has unearthed vast reserves of natural gas. Competition over the rights to tap those resources is compounding existing tensions over sovereignty and maritime borders. Without more active engagement by outside powers, these disagreements will be difficult to resolve.

Israel stands to be the main beneficiary of the eastern Mediterranean’s bounty, due mainly to the geographic distribution of recent discoveries. In 2009 and 2010, a pair of U.S.-Israeli consortiums exploring the seabed near Haifa discovered the Tamar and Leviathan fields, which collectively hold an estimated 26 trillion cubic feet (tcf) of natural gas. The timing of these discoveries was opportune. Since the beginning of the Arab Spring, Israel has suffered frequent supply interruptions and the eventual termination of its contract with Egypt, which had previously provided 40 percent of the gas Israel consumed, at below-market rates. The Tamar and Leviathan fields, once developed, could satisfy Israel’s electricity needs for the next 30 years and even allow it to become a net energy exporter.

Recent Oil Discovery off Lebanese Coast Draws Naval Powers to East Mediterranean

Claude Salhani*       oilprice.com

The discovery a few years ago of an important deposit of oil and gas reserves in the waters just off the Lebanese, Israeli and Cypriot coasts has raised the interest of foreign militaries who have in recent weeks become attracted to the region, adding ingredients at sea to an already explosive atmosphere on land.
From China to Iran, not forgetting Turkey, Israel, the United States, Britain, and France, all the principal actors in the region are now present in the waters of the Eastern Mediterranean.

In addition to the important oil fields under the sea waiting to be exploited, the bloody civil war that has been raging in next door Syria for the past two years has brought renewed interest in these troubled waters.

Russia, primarily, is very concerned by what the future holds for the Assad regime in Damascus as the Syrian Mediterranean port of Tartous serves as the Russian Mediterranean Fleet’s main port of call, where the Russians continue to hold onto an important facility established back in the days of the Soviet Union. For Russia, whose northern Baltic ports freeze over during the long cold winter months, having access to a friendly port for its Med fleet is a matter of national security.

To reiterate just how important the Eastern Mediterranean Sea plays in Russian affairs, Moscow has just dispatched a naval task force comprised of about 10 vessels, including its only aircraft carrier, the Admiral Kuznetzov, to the region.

Gas in the eastern Mediterranean: Drill, or quarrel?

The Economist 

Politics could choke supplies from big new offshore gasfields

AN OLD joke—that Moses led his people to the only place in the Middle East without oil—needs updating. Israel may not have oil, but it does have gas. The Tamar gasfield, discovered in 2009 off Israel’s coast, holds great promise. Leviathan, discovered in 2010, holds even more. The US Geological Survey reckons that there could be 120 trillion cubic feet (tcf) of technically recoverable gas in the Levant basin, which washes the shores of Israel, Lebanon, Syria and Cyprus (see map). So far, however, only 35tcf has been located. And as Simon Henderson of the Washington Institute, a think-tank, points out: “Israel’s initial euphoria” is fading. The region’s political fractiousness does not end at the water’s edge.

Israel, which relies heavily on imported energy, has much to gain. The gas discovered so far could satisfy its domestic demand for 20 years, according to the Oxford Institute for Energy Studies. And exports could yield oodles of cash. Cyprus stands to benefit, too, from the 7tcf so far discovered off its coast. It currently generates 95% of its energy with pricey oil; gas would be cheaper, and could be exported.

Turkey’s Energy Challenges

Daniel WAGNER* & Giorgio CAFIERO**      CounterPunch

Ankara will soon be confronted with some difficult foreign policy decisions that could affect its long-term energy interests. The discovery of vast reserves of natural gas off the coasts of Cyprus and Israel could oblige Turkey to resolve longstanding disputes with its neighbours.

Turkey has managed to maintain impressive growth rates over the past decade in spite of a lack of indigenous sources of energy. Ankara has pursued a foreign policy aimed at diversifying the country’s energy imports while simultaneously positioning itself as a major energy hub. Turkey’s geostrategic position makes achieving this dual objective challenging, but it has managed to strike a balance between being assertive and deferential in acquiring and managing its energy supply. While the Turkish government’s power to influence events in the region is of course limited, it will be compelled to make some difficult foreign policy decisions in the near term that could substantially impact its long-term energy interests.

Turkey imports 91 percent of its oil and 98 percent of its natural gas. In 2011, approximately 51 percent of its oil came from Iran and 55 percent of its natural gas from Russia. Iraq’s resurrection as a major oil and gas exporter to the world offers Turkey an opportunity to become an increasingly influential energy hub between the Arabian Gulf and European markets. However, the tense triangular relationship between Turkey, Iraq and the Kurdish Regional Government has greatly complicated the energy trade with Iraq. This has also cast doubt about the long-term reliability of the Iraqi-Turkish pipeline that exports nearly 400,000 barrels per day to the important port of Ceyhan in southern Turkey. Turkey’s perennial battle with Kurdish separatists has served to ensure that the relationship with Iraq remains problematic and uncertain.

Israel's Natural Gas Challenges

Simon HENDERSON*        The Washington Institute    PolicyWatch 1978

A top-level Israeli government committee has produced a blueprint for exploitation of substantial natural gas reserves, but solutions must still be devised for a range of technical, commercial, and political problems.

In October 2011, following the discovery of large quantities of natural gas off Israel's Mediterranean coast, Prime Minister Binyamin Netanyahu appointed an interministerial committee to formulate policies for development of the new resources. Last week, the so-called Zemach Committee -- after chair Shaul Zemach, director-general of the Ministry of Energy and Water -- offered its recommendations. The panel's mandate was to offer suggestions on ensuring Israel's energy security, facilitating competition in its emerging domestic natural gas market, leveraging the environmental benefits of natural gas compared with other fuels, and maximizing the economic and political benefits.

BACKGROUND

Natural gas was first found in Israel's waters in 1999, when the Noa field was discovered off the coast of Ashdod. It was judged too small for commercial development, but in 2000, the Mari-B field was found nearby and has been supplying gas to Israeli power plants since 2004. In addition, Egypt began exporting gas to Israel in 2008, though it canceled that contract earlier this year after the pipeline was repeatedly sabotaged in Sinai. In January 2009, the Tamar field was discovered eighty miles off Haifa, with enough gas to supply Israel's domestic needs for fifteen years. And in December 2010, an even larger discovery was made in the Leviathan field west of Tamar. Although its full size has yet to be confirmed by further exploratory drilling, the finding led Israel to begin seeing itself as a significant gas exporter. Further small gas fields have since been discovered.

The Land of Gas and Honey

Robin M MILLS*     Foreign Policy

Israel's giant new natural gas find will transform the Middle East -- and add more fuel to an already combustible region.

Mother Nature's distribution of oil and gas resources around the world suggests she has a mischievous sense of humor. In the Persian Gulf, South China Sea, and Caspian Sea, large fields lie in disputed zones between unfriendly neighbors.

Now we must add another hot spot to that list. New, giant, natural gas finds promise to transform the energy security and economy of Israel and, perhaps, its neighbors. But these treasures could hardly have been better placed to stir up trouble, complicating three of the world's most intractable conflicts: between Israel and the Palestinians, Israel and Lebanon, and Greek and Turkish Cypriots. The recent sharp deterioration in Turkish-Israeli relations makes disputes over gas even more fraught with danger.

Golda Meir, the feisty, cantankerous, and quotable fourth Israeli prime minister, used to complain that Moses led the Israelites through the desert for 40 years to bring them to the only place in the Middle East without oil. In 2000, after Britain's BG had discovered significant volumes of gas at Gaza Marine, she was proved at least half-wrong when U.S. exploration company Noble Energy found a similar-sized field, Mari-B, in Israeli waters.

Greek Cyprus Drilling for oil and gas to start by October 1 Turkey

Stefanos Evripidou    Cyprus Mail

DRILLING FOR natural gas off the southern coast of Cyprus will begin on or before October 1, after which the country will get a concrete picture of how rich its resources are, said Energy Service director Solon Kassinis yesterday.

Cyprus has signed a production-sharing contract with Houston-based Noble Energy. The company has a concession to explore for hydrocarbons in an offshore field in its Exclusive Economic Zone (EEZ) south-east of Cyprus, known as Block 12.

The energy chief said drilling would start by October 1 latest after which, in approximately two months time Cyprus will have a clear view of the size of its hydrocarbons reserves for that block.

The government will then proceed with a second round of licensing for other blocks in the region.

The authorities expect a revised version of the environmental impact study to be submitted this week. The original study was sent to all relevant government departments, who asked for certain clarifications and minor changes.