Monday, October 25, 2010

Oil Deposits Fuel Tension in Eastern Mediterranean

Oil and gas discoveries in the eastern Mediterranean are notching up tension in a region that already has its fair share of pernicious disputes. Rival communities on the divided island of Cyprus as well as Turkey and arch enemies Lebanon and Israel are racing to stake their claims in what is one of the world’s newest oil frontiers.

The deposits may be minor compared to those of the oil-majors in the Gulf, but for small nations in the eastern Mediterranean they promise to be substantial. Yet, rather than providing an opportunity to enhance stability through economic cooperation, the discoveries are raising the specter of renewed conflict as the parties strike deals to start exploration.

Complicating matters is the fact that the deposits are all in international waters, historically a reason to call in the gun boats in the absence of a production-sharing agreement. The potential threat is heightened by the fact that Israel and Lebanon are locked into a state of war while Turkey backs its Turkish Cypriot brethren in their communal dispute with the majority Greek islanders. While Israel and Lebanon have warned that their economic rights in the eastern Mediterranean could constitute a casus belli, Turkey and the two Cypriot communities have so far steered clear of military threats in their perennial disputes over oil and gas.

Tension is nonetheless mounting with last week’s Turkish announcement that it is about to start exploring for oil off the coast of northern Cyprus, the breakaway Turkish Cypriot states that hosts an estimated 40,000 Turkish troops. For its part, the internationally recognized government of Greek Cyprus is negotiating oil exploration deals with Lebanon.

For now, Israel may be the party laughing all the way to the bank. Lebanon has yet to achieve agreement with Cyprus and Syria on its economic boundaries in the eastern Mediterranean. Meanwhile, Israel has completed preliminary exploration on the back of an agreement with Cyprus and is preparing to begin extracting black gold. Lebanon will no doubt assert that Israel is drilling in Lebanese territory, but will need years to prove its claim and given Israeli military superiority is unlikely to be able to do much about it.

Nonetheless, the race for resources will only complicate efforts to reduce tension in a region that already has sufficient flash points.

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