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Tuesday / November 20.

Many flashpoints in region’s search for new gas finds

The conflict over the Mediterranean areas rich in natural gas appears to be intensifying and may even lead to military interventions between the many countries involved. However, gas production has begun to flow, with some of the producers achieving self-sufficiency while others have turned into exporters of natural gas, which is the least polluting of natural energy sources.

Israel was the first to commence production and with the aim of swiftly converting from a natural gas importer to exporter. This resulted in its economy reviving, which in turn contributed to having the funds in hand to support colony activities in the occupied Palestinian territories.

Five years ago, Cyprus announced promising gas discoveries; yet its production development faced difficulties due to Turkey’s entry into the maritime border of this small country.

In a substantial development, this year Egypt has announced the start of natural gas production after discovering large quantities in the Dahr field, and thanks to the cooperation of some leading companies, including Eni. This will definitely achieve self-sufficiency for Egypt, turning it into a gas exporter within the next two years.

This news is of great import to all of us because the Egyptians deserve the best of opportunities, and more so as the gas discovery will contribute to solving many economic difficulties and open up scope for development and job creation.

Lebanon, which is controlled by the Iran-backed Hezbollah militia, also announced gas discoveries near its coasts. Yet, Israel has declared that these areas fall within its maritime borders.

This will make it difficult for Lebanon to utilise the discoveries, which could have been of vital importance to an economy that has deteriorated due to setbacks in vital sectors such as tourism, industry and agriculture after militias got this beautiful country involved in regional conflicts that had nothing to do with Lebanon.

All of that has done nothing but revive the appetite of a large country — Turkey — overlooking the Mediterranean. Turkey is in dire need of energy resources, especially natural gas, which is currently imported from Russia, Iran and Qatar.

Conflict ridden region

In addition to laying claims to Cyprus’ discoveries, Turkey recently highlighted the possibility of objecting to Egypt’s exploration borders, which means tensions might break out between two in this vital and conflict-ridden region.

Since Syria is located in the middle of all those countries, it is definite there will be a continuation of the conflict in that area, which took an international character with the involvement of major and regional powers. Surveys indicate that the gas production centre will be in Syrian territorial waters.

This was evidenced by Russia’s statements last week in which it pointed out that the goal of the US in Syria is to seize natural resources, in other words “natural gas”. The world stands on the verge of an imminent conflict that will change many alliances and balance of power. It may even lead to the disintegration of some countries and stroking the fire of conflict between Nato member countries themselves. Greece and the West support Cyprus while Turkey sees Russia as its reliable ally.

The US is also trying to support Israel or attempting to intervene directly to obtain some concessions for itself within the large gasfields, which could intensify the issue.

These developments would undoubtedly lead to a significant deterioration in gas prices, especially given that there will be huge quantities of shale gas produced by the US as well as by Australia, both of whom could soon become the largest producers and exporters of gas in the world.

Over the past decade, gas prices had fallen from $11 to $3.5 tcf, and more recently by 25 per cent to $2.6, leaving profound negative effects on the economies of exporting countries.

Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.

via GN