Showing posts with label gas. Show all posts
Showing posts with label gas. Show all posts

Friday, December 13, 2019

Turkey-Libya Maritime Border Deal and Gas Exploration

 
illustration



Turkey and the internationally-recognized, U.N.-backed Government of National Accord (GNA) of Libya signed a memorandum of understanding (MoU) on Nov. 27, shaking the Eastern Mediterranean region. (more)

Then on Dec. 5, the Turkish Parliament ratified the MoU with Libya, showing that it is a government policy, not just one of President Recep Tayyip Erdoğan's own views. All the parties in Turkey welcomed the agreement as it is a state matter which has been on the table for decades even before President Erdoğan's Justice and Development Party (AK Party) won the elections for the first time in 2002. However, Erdoğan is the one who has achieved it.

The maritime deal in question, signed by Erdoğan and GNA head Fayez Al Sarraj in Istanbul, aims to secure Libya and Turkey's rights in the Mediterranean and prevent any fait accompli attempts by regional states, some which have already made maneuvers to do so with their drilling activities and energy deals. With this agreement, Turkey and Libya, which are maritime neighbors, have established 18.6 nautical miles of a continental shelf and Exclusive Economic Zone (EEZ) boundary line between the two countries.

Greece, the EU, Egypt, Israel and the Greek Cypriot Administration were the first to condemn the MoU. Of course, Libya's warlord Gen. Khalifa Haftar, who is responsible for the ongoing chaos in Libya by invading east Libya and controlling the port city of Benghazi, has also gone mad after the deal. Many people might not be aware that Haftar, a puppet of the proxy war in Libya, has ties with Israel, the UAE, Saudi Arabia and Egypt, and is working for the benefit of those countries.

The Haftar hostility

Meanwhile, Haftar's hostility toward Turkey is growing. This summer, he ordered an attack on Turkish ships in Libyan territorial waters, closed air space for Turkish planes and detained Turkish citizens in the territory which he controlled. Since all of his attempts to take Tripoli, backed by Turkey, have failed, he is losing his mind. That is why he arrested six Turkish citizens but had to release them quickly as he did not dare see what Turkey would do to bring its citizens back. Turkey has taken all measures against future possible hostile moves or threats and is ready to confront attacks unless Haftar sits still.

Egypt was one of the countries that condemned the Turkey-Libya maritime deal; but it lowered its voice recently because the deal is, in fact, beneficial to Egypt as well. The boundary line between Turkey and Libya increases Egypt's EEZ too.

Greece and the Greek Cypriot Administration are the countries most furious over the deal. However, they are two of the leading parties who isolated the interests of other regional countries for years. As Greece is not strong enough to confront Turkey, Greece expelled the Libyan ambassador to show its anger. But this is just a move that shows Athens cannot contain itself on the deal. We know that Athens will go to the EU and Western countries crying and saying that Turkey has expansionist projects in the East Mediterranean, they are deceived by Libya, and Erdoğan has to be stopped. We can expect more threats and typical warmongering newspaper headlines in Greek media as well.

Regional tension

That said, Turkey keeps saying that the diplomatic channels for maritime boundary delimitation with all coastal states including every country that has rights concerning the East Mediterranean are open, contrary to the selfish policies of Israel, Greece, the Greek Cypriot Administration and Egypt. The deal with Libya is not to raise tensions in the region but a move to protect Turkey and Libya's interests and a start to bring all other coastal states to the table for talks on their rights. But that doesn't mean Turkey will stop at this point. As President Erdoğan said, both countries can carry out joint exploration operations in the eastern Mediterranean Sea.

Since 2003, the Greek Cypriot Administration has been seeking an adventurous policy in the region by concluding maritime delimitation agreements, conducting oil and gas exploration, and issuing unilateral permits for such activities around the island. Its provocative policies ignore the Turkish Cypriots' existing and inherent equal rights over the natural resources and the sea around the island. By allying with Egypt and Israel, the Greeks and Greek Cypriots have disrespected other coastal states. The Eastern Mediterranean drilling activities of Turkey, the country that has the longest continental coastline, to defend its own rights and the rights of the Turkish Republic of Northern Cyprus' (TRNC) people has been condemned by those countries and their backers too. The maliciousness toward Turkey that aims to limit the Turkish EEZ to the Gulf of Antalya cannot be tolerated, of course. Turkey's position is very clear: The dispute has to be solved with comprehensive negotiations which will benefit all coastal states as well as Turkish and Greek Cypriots.

Gas discovery

On the other hand, a huge natural gas field was discovered off the shores of Haifa port of Israel nine years ago. Namely, the Leviathan field's recoverable volume is estimated to be more than 600 billion cubic meters of gas by Noble Energy, the U.S. company that discovered the field in 2010. Israel's gas reserves are not large compared to global volumes, however, the numbers associated with Leviathan were depicted as a game-changer for Israel. But today, only one very small gas field, Tamar, supplies the Israeli energy sector. The Tamar field contains only around 80 billion cubic meters of gas, and yet it provides around 60% of Israel's electricity and looks like it will do so for years. So, if Leviathan starts to work, it might make Israel a net gas exporter. Meanwhile, other fields have been said to be found in the same basin such as the Aphrodite field near Cyprus.

Energy experts believe that there is more gas waiting to be discovered in the Eastern Mediterranean along the coasts of Gaza, Lebanon and Egypt's Sinai in the south, and Greek Cyprus, the TRNC and Syria in the north. However, apart from Tamar, the gas in question is in waiting and further exploration has been frozen as there isn't an export route for an enormous amount of gas, of which the volume far exceeds the domestic needs of the countries involved.

Even if Israel succeeds in exporting natural gas from Leviathan, it has to work with other regional countries to deliver it to Europe. Today it looks like it has no option other than Greek Cyprus and Egypt. According to last year's reports, Israel, Greek Cyprus, Greece and Italy have reached an agreement to lay a pipeline connecting Israel's gas reserves to the three countries, in a major project, namely East Med, that will supply gas from the Eastern Mediterranean to Europe. Europe, too, has an interest in seeing the development of the East Med proceed, which would enable it to diversify its energy suppliers and reduce its dependence on Russian gas.

The LNG facility

However, the construction cost of East Med, according to initial estimates, is $7 billion. Nicosia is also pushing to link the pipeline through the Aphrodite field to a liquefied natural gas (LNG) facility in Egypt, which will also cost around $1 billion. And we have to note that such a major project is expected to be financed by the EU.

Even though it is supported by the Greek and Italian governments, which are both known to be very critical of Brussels, the cost is quite high. Constructing an LNG processing plant and shipping the resources not only to Europe but also to the growing markets of Asia in order to compensate the capital cost is an option. But even if it is done, it would be quite uncompetitive in a world where there is no shortage of gas supply.

It has already been very annoying that the Turkish EEZ is the obvious and most cost-effective transit point for this gas as it is geographically very close to the fields in question and already has a domestic pipeline network that could carry the gas to Europe. Through an offshore pipeline to Turkey and by collecting resources from all the fields along the way, the East Med can be carried out. However, this option has already been ruled out because of the current disputes. Israel's savage policies aiming to wipe off the Palestinians and the ongoing dispute between Greek Cypriots and the Turkish Republic of Northern Cyprus are the other political obstacles against such a solution.

With the agreement between Turkey and Libya, the East Med Project's pipeline has to go through Turkey's EEZ. It has strengthened Turkey's hand in the region, and it will provide a direct role in the energy geopolitics game, on a legal basis. For that reason, all the plans that have isolated other regional countries have been turned upside down for now. For Greece, the Greek Cypriot Administration and Israel, the party is over, and they are not dancing anymore.

Thursday, March 18, 2010

Gaza Gas Project

 
Gas is one of the most important natural resources in Palestine. Since its discovery, offshore Gaza Gas has been regarded as a unique project in Palestine, in view of the fact that Gaza Gas is the only mineral resource found in the Palestinian Territory. The natural gas reserves constitute an important and strategic source for the Palestinian economy.

In 1999, the Palestinian National Authority (“PNA”) has exclusively awarded the area offshore Gaza for hydrocarbons exploration and marketing to British Gas (“BG”)/Consolidated Contractors Company Oil and Gas S.A.L (“CCC”) consortium (“the developers”). The award was granted pursuant to the agreements signed between the PNA and the developers, granting the latter the exclusive rights to produce, process and sell commercial discoveries in the license area for a period of 25 years to start upon approval of a field development plan.

In 2000, the developers announced the discovery of proven commercial gas reserves in the Gaza Marine Field, and proven commercial gas reserves in the Border field; a field that is in territorial waters of both Gaza and Israel. The developers are currently negotiating the terms of two Gas Sale Agreements, after which only one agreement will be approved and signed between relevant parties.

Among other positive aspects of the Gaza Gas project, in addition to injecting large funds into the local economy, development of the gas fields and exporting natural gas will send positive signals about the investment environment in Palestine. Success of the Gaza Gas project will enhance investors‘ confidence in the Palestinian national economy as a result of the complicated nature of this project and the cross-border transactions and commitments it requires. Replacing gasoline with gas at the Palestine Electric Company in Gaza will reduce the current bill that the Palestinian National Authority pays to Israel to provide Palestinians in Gaza with electricity.

· 1999 The Palestinian Authority awarded the Gaza Marine license area to BG Group and its partner CCC.

· 2000 Following the acquisition of 1000sq km of 3D seismic in early 2000, as operator on the project BG group successfully drilled two wells later the same year with the first well BG Group discovered the Gaza Marine field, approximately 36km from the Gaza coast. The second well confirmed the presence of an important new gas discovery.

· 2001 A technical study recommended a sub-sea development with pipeline to processing facilities on the shore.

· 2002- 2004 BG Group sought private customers in the power generation and industrial sectors in Israel.

· 2005 BG Group examined the potential to export gas from Gaza Marine to Egypt for liquefaction and onward export to LNG world markets.

· 2006 Negotiations with the government of Israel were re-opened after it stated its intent to busy Gaza Marine gas to fill the expected shortfall in supply after 2011.

More

Sunday, March 7, 2010

Palestinian oil and gas

 
In the late 1990s, the Palestinian government was able to secure an agreement with British Gas that allowed them to begin drilling for natural gas and oil in the Mediterranean Sea.

After years of drilling and exploration, Palestine was rewarded with an oil reserve 22 miles off of the coast of the Gaza Strip. The entire country was excited by this natural mineral that would hopefully provide them with the economic freedom and financial stability they desired. Unfortunately, the financial success did not come directly on the heels of their discovery.

International instability and internal political strife has made it extremely difficult for Palestinian officials to utilize their newfound resource. In 2005 Israel delivered a major blow to the Palestinians fledgling oil industry by choosing to import natural gas from Egypt. By doing this, Israel completely bypassed its neighbor in favor of making a political statement.

The Israeli Invasion and Gaza's Offshore Gas Fields

 
Israel: Gaza, Oil And The Economics of Occupation


The military invasion of the Gaza Strip by Israeli Forces bears a direct relation to the control and ownership of strategic offshore gas reserves.

This is a war of conquest. Discovered in 2000, there are extensive gas reserves off the Gaza coastline.

British Gas (BG Group) and its partner, the Athens based Consolidated Contractors International Company (CCC) owned by Lebanon's Sabbagh and Koury families, were granted oil and gas exploration rights in a 25 year agreement signed in November 1999 with the Palestinian Authority.

The rights to the offshore gas field are respectively British Gas (60 percent); Consolidated Contractors (CCC) (30 percent); and the Investment Fund of the Palestinian Authority (10 percent). (Haaretz, October 21, 2007).

The PA-BG-CCC agreement includes field development and the construction of a gas pipeline.(Middle East Economic Digest, Jan 5, 2001).

The BG licence covers the entire Gazan offshore marine area, which is contiguous to several Israeli offshore gas facilities. (See Map below). It should be noted that 60 percent of the gas reserves along the Gaza-Israel coastline belong to Palestine.

The BG Group drilled two wells in 2000: Gaza Marine-1 and Gaza Marine-2. Reserves are estimated by British Gas to be of the order of 1.4 trillion cubic feet, valued at approximately 4 billion dollars. These are the figures made public by British Gas. The size of Palestine's gas reserves could be much larger.

Who Owns the Gas Fields

The issue of sovereignty over Gaza's gas fields is crucial. From a legal standpoint, the gas reserves belong to Palestine.

The death of Yasser Arafat, the election of the Hamas government and the ruin of the Palestinian Authority have enabled Israel to establish de facto control over Gaza's offshore gas reserves.

British Gas (BG Group) has been dealing with the Tel Aviv government. In turn, the Hamas government has been bypassed in regards to exploration and development rights over the gas fields.

The election of Prime Minister Ariel Sharon in 2001 was a major turning point. Palestine's sovereignty over the offshore gas fields was challenged in the Israeli Supreme Court. Sharon stated unequivocally that "Israel would never buy gas from Palestine" intimating that Gaza's offshore gas reserves belong to Israel.

In 2003, Ariel Sharon, vetoed an initial deal, which would allow British Gas to supply Israel with natural gas from Gaza's offshore wells. (The Independent, August 19, 2003)

The election victory of Hamas in 2006 was conducive to the demise of the Palestinian Authority, which became confined to the West Bank, under the proxy regime of Mahmoud Abbas.

In 2006, British Gas "was close to signing a deal to pump the gas to Egypt." (Times, May, 23, 2007). According to reports, British Prime Minister Tony Blair intervened on behalf of Israel with a view to shunting the agreement with Egypt.

The following year, in May 2007, the Israeli Cabinet approved a proposal by Prime Minister Ehud Olmert "to buy gas from the Palestinian Authority." The proposed contract was for $4 billion, with profits of the order of $2 billion of which one billion was to go the Palestinians.

Tel Aviv, however, had no intention on sharing the revenues with Palestine. An Israeli team of negotiators was set up by the Israeli Cabinet to thrash out a deal with the BG Group, bypassing both the Hamas government and the Palestinian Authority:

"Israeli defence authorities want the Palestinians to be paid in goods and services and insist that no money go to the Hamas-controlled Government." (Ibid, emphasis added)

The objective was essentially to nullify the contract signed in 1999 between the BG Group and the Palestinian Authority under Yasser Arafat.

Under the proposed 2007 agreement with BG, Palestinian gas from Gaza's offshore wells was to be channeled by an undersea pipeline to the Israeli seaport of Ashkelon, thereby transferring control over the sale of the natural gas to Israel.

The deal fell through. The negotiations were suspended:

"Mossad Chief Meir Dagan opposed the transaction on security grounds, that the proceeds would fund terror". (Member of Knesset Gilad Erdan, Address to the Knesset on "The Intention of Deputy Prime Minister Ehud Olmert to Purchase Gas from the Palestinians When Payment Will Serve Hamas," March 1, 2006, quoted in Lt. Gen. (ret.) Moshe Yaalon, Does the Prospective Purchase of British Gas from Gaza's Coastal Waters Threaten Israel's National Security? ÊJerusalem Center for Public Affairs, October 2007)

Israel's intent was to foreclose the possibility that royalties be paid to the Palestinians. In December 2007, The BG Group withdrew from the negotiations with Israel and in January 2008 they closed their office in Israel.(BG website).

Invasion Plan on The Drawing Board

The invasion plan of the Gaza Strip under "Operation Cast Lead" was set in motion in June 2008, according to Israeli military sources:

"Sources in the defense establishment said Defense Minister Ehud Barak instructed the Israel Defense Forces to prepare for the operation over six months ago [June or before June] , even as Israel was beginning to negotiate a ceasefire agreement with Hamas."(Barak Ravid, Operation "Cast Lead": Israeli Air Force strike followed months of planning, Haaretz, December 27, 2008)

That very same month, the Israeli authorities contacted British Gas, with a view to resuming crucial negotiations pertaining to the purchase of Gaza's natural gas:

"Both Ministry of Finance director general Yarom Ariav and Ministry of National Infrastructures director general Hezi Kugler agreed to inform BG of Israel's wish to renew the talks.

The sources added that BG has not yet officially responded to Israel's request, but that company executives would probably come to Israel in a few weeks to hold talks with government officials." (Globes online- Israel's Business Arena, June 23, 2008)

The decision to speed up negotiations with British Gas (BG Group) coincided, chronologically, with the planning of the invasion of Gaza initiated in June.It would appear that Israel was anxious to reach an agreement with the BG Group prior to the invasion, which was already in an advanced planning stage.

Moreover, these negotiations with British Gas were conducted by the Ehud Olmert government with the knowledge that a military invasion was on the drawing board. In all likelihood, a new "post war" political-territorial arrangement for the Gaza strip was also being contemplated by the Israeli government.

In fact, negotiations between British Gas and Israeli officials were ongoing in October 2008, 2-3 months prior to the commencement of the bombings on December 27th.

In November 2008, the Israeli Ministry of Finance and the Ministry of National Infrastructures instructed Israel Electric Corporation (IEC) to enter into negotiations with British Gas, on the purchase of natural gas from the BG's offshore concession in Gaza. (Globes, November 13, 2008)Ê

"Ministry of Finance director general Yarom Ariav and Ministry of National Infrastructures director general Hezi Kugler wrote to IEC CEO Amos Lasker recently, informing him of the government's decision to allow negotiations to go forward, in line with the framework proposal it approved earlier this year.

The IEC board, headed by chairman Moti Friedman, approved the principles of the framework proposal a few weeks ago. The talks with BG Group will begin once the board approves the exemption from a tender." (Globes Nov. 13, 2008)

Gaza and Energy Geopolitics

The military occupation of Gaza is intent upon transferring the sovereignty of the gas fields to Israel in violation of international law.

What can we expect in the wake of the invasion?

What is the intent of Israel with regard to Palestine's Natural Gas reserves?

A new territorial arrangement, with the stationing of Israeli and/or "peacekeeping" troops?

The militarization of the entire Gaza coastline, which is strategic for Israel?

The outright confiscation of Palestinian gas fields and the unilateral declaration of Israeli sovereignty over Gaza's maritime areas?

If this were to occur, the Gaza gas fields would be integrated into Israel's offshore installations, which are contiguous to those of the Gaza Strip. (See Map 1 above).

These various offshore installations are also linked up to Israel's energy transport corridor, extending from the port of Eilat, which is an oil pipeline terminal, on the Red Sea to the seaport - pipeline terminal at Ashkelon, and northwards to Haifa, and eventually linking up through a proposed Israeli-Turkish pipeline with the Turkish port of Ceyhan.

Ceyhan is the terminal of the Baku, Tblisi Ceyhan Trans Caspian pipeline. "What is envisaged is to link the BTC pipeline to the Trans-Israel Eilat-Ashkelon pipeline, also known as Israel's Tipline." (See Michel Chossudovsky, The War on Lebanon and the Battle for Oil, Global Research, July 23, 2006)