Oil and Gas Finds Fueling Tension in Eastern Mediterranean

By James M. Dorsey

(In)Coherenci / World Politics Review

Oil and gas discoveries in the eastern Mediterranean are ratcheting up tensions 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 staking claims in one of the world's newest oil frontiers.

The region's deposits are minor compared to the Persian Gulf, but for small nations like Israel and Cyprus they hold substantial promise. But rather than providing an opportunity for stability through economic cooperation, the discoveries raise the specter of renewed conflict as the parties push ahead with deals to start exploration.

Complicating matters is the fact that the deposits are in international waters, historically a reason for nations to call in the gun boats in the absence of a production-sharing agreements. The potential threat is heightened by the state of war between Israel and Lebanon and tension between Turkey and Cyprus over Turkey's backing of Turkish Cypriots in their dispute with the island's Greek Cypriot majority.

While Israel and Lebanon have warned that their economic rights in the eastern Mediterranean may 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.

Turkey's announcement last month that it will soon begin to explore for oil in a 288,000-square-kilometer area between the southeastern Turkish city of Mersin and the northern coast of Cyprus has nonetheless fueled tension. Turkey maintains an estimated 40,000 troops in northern Cyprus since its invasion of the island in 1974 and is the only country to have recognized the north's self-declared Turkish Republic of Northern Cyprus (TRNC).

The internationally recognized Greek Cypriot government, the Republic of Cyprus (ROC), which represents the island in the European Union, accuses Turkey of acting as a "bully" in disputes over oil-exploration licenses that are a continuous point of friction in two-year-old peace talks aimed at ending one of the world's most enduring conflicts.

Turkey and the TRNC have denounced ROC negotiations of oil-exploration deals with Lebanon that will also include Syria, arguing that it lacks the authority. Lebanon and the ROC signed an exclusive-zone agreement in 2007 to demarcate an undersea border that would determine the areas in which each may grant oil- and gas-exploration licenses. ROC signed a similar agreement with Egypt, and in September it concluded a memorandum of cooperation with Israel for the surveying and mapping of joint-research energy projects.

ROC initially licensed companies in 2007 to explore blocks in a 20,000 square-kilometer area. Texas-based Noble Energy, an independent oil company, together with its Israeli consortium partners, Delek Drilling and Avner Oil and Gas, acquired a license, but Turkey's opposition persuaded majors such as ExxonMobil, BP, China National Petroleum Corporation and India's Oil and Natural Gas Corporation not to participate. Noble, as well as Libya's National Oil Company, are expected to participate in a second ROC licensing round next year.

Turkey has warned the Lebanese and the ROC governments that it is "determined to protect its rights and interests" and will "not allow attempts to erode them." Turkish officials, however, believe that Lebanon and the ROC will not start exploration any time soon. Amid mounting tension in Lebanon over the proceedings of a United Nations investigation into the 2005 killing of former Prime Minister Rafik Hariri, Ankara believes that parliament is unlikely to focus on the agreement once it is presented for ratification.

As a result, Turkey and Israel may be laughing all the way to the bank. Israel has completed preliminary exploration and is preparing to begin extracting gas in 2012. Israel hopes the oil and gas finds will make it energy-independent, but its preliminary efforts have Lebanon up in arms. Staking its claim on the potential reserves, Lebanon sees newly found oil and gas wealth as its ticket to paying off its $50 billion national debt.

Lebanon accuses Israel of intending to siphon the gas from reserves off the northern Israeli coast that it says are rightfully Lebanese. Israel denies the claim and says that the three fields it has invested in lie between it and Cyprus.The largest of the fields, Leviathan, is estimated to hold 16 trillion cubic feet of gas worth billions of dollars.

The fields are in international waters between Israel and Cyprus, beyond the maritime borders that extend 12 nautical miles off the coasts of both countries. Under international law, Israel or Cyprus could declare an exclusive economic zone that extends 200 nautical miles beyond their maritime borders, but so far neither has opted to do so. Israeli officials say they see no need to make such a declaration because the reserves lie under Israel's continental shelf.

The conflicting Israeli and Lebanese claims have both countries rattling their sabers. Israeli Infrastructure Minister Uzi Landau has warned that Israel "will not hesitate to use force" to protect its investment. In response, Lebanese parliamentary speaker Nabih Berri called for speedy approval of proposals for oil and gas exploration off the coast of Lebanon as "the best way to respond to Israeli threats."

It will take years for Lebanon to prove its claims that Israeli exploration and production would violate Lebanese territory. Even if it does, Beirut lacks the military muscle to do anything about it. That frustrating realization is likely to complicate efforts to reduce tension in a region that already has enough flash points.