The the exploration and exploitation of hydrocarbons are uncertain,

The large reserves of
hydrocarbon that have been discovered in the Eastern Mediterranean will play a
pivotal role in the region’s commercial and geopolitical future.  These hydrocarbon resources, although
relatively small when considered on a global scale, hold the potential to forge new commercial ties and to promote
cooperation in a region presently characterized by social unrest, refugee
crises, the Israeli-Palestinian conflict, economic turmoil in Egypt and Jordan,
and tensions between Turkey, one of the leading factors in the global gas
market, and Russia, its main supplier.

The Eastern Mediterranean discoveries
also possess the potential to satisfy both US, and European interests in the
region by forging hopeful developments in regional cooperation. These
developments include but are not limited to the ongoing Cyprus settlement
negotiations and the Iran nuclear agreement, which will hopefully bring
about the return of Iranian oil to the global energy market.

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Yet there are certain challenges
involving hydrocarbon production and exportation that render the exploitation
of such resources a true geopolitical puzzle. It is evident that domestic and
regional politics will continue to reshape the map and thus profoundly
influence the development and exploitation of hydrocarbon.

This paper offers an overview of the status
quo of Eastern Mediterranean hydrocarbon developments. Providing an analysis of
the positions of Turkey and other international actors, the paper first
explores who has the sovereign right to exploit the natural resources in the
exclusive economic zone (EEZ) of Cyprus (what might broadly be called the
sovereignty question on offshore hydrocarbons). It is also examined how attempts
to start inter-communal discussion on hydrocarbons could potentially act as a
new platform for cooperation within, or parallel to, the settlement
negotiations between Cyprus and Turkey. The paper evaluates
the prospects and challenges of energy cooperation between Israel and Turkey as
well as energy and strategic cooperation between Cyprus and Israel. The
analysis places these projects in the context of various political, security
and energy-related developments in the Eastern Mediterranean and the Middle
East, while it also discusses the prospects and conditions for a Cyprus
settlement as a pre-requisite to future cooperation between Turkey and Cyprus.

The report further outlines the reasons why Lebanon’s
plans for the exploration and exploitation of hydrocarbons are uncertain, given
the political as well as commercial challenges that the country faces in its quest to become an important gas province
in the East Mediterranean. It
deals with Lebanon’s inability to formulate appropriate legislative and fiscal
policy, effective institutional structures, and efficient management of gas
revenues. If confirmed, Lebanon’s gas reserves could definitely be developed
given the country’s lack of resource and technological constraints, yet the
aforementioned above- ground challenges will still pose a threat to the
exploitation of such resources.

            The paper also examines Russia’s energy-political relations with Turkey, Cyprus, the
EU, and the wider Middle East. It asserts that Russia’s real
contribution to oil and natural gas exploration in the Eastern Mediterranean is
little. Evaluating the balance of motivations and disincentives, the paper
argues that there is hardly any reason to expect that Russia’s pattern of
under-performance would change. The
development of new sources of gas supply in this remote but sensitive corner of
the European market does not fundamentally interest Moscow. In fact, Russia’s
Gazprom would possibly take interest in controlling the unexplored but not very
promising fields in the Eastern Mediterranean only with the prospect of keeping
them idle.

         In the same manner, the report looks at Turkey’s position
vis-à-vis the rising energy prospects and ensuing geopolitical shifts in the
region. Turkey’s energy profile and supply diversification plans involving
Azerbaijan and Northern Iraq are evaluated from a geopolitical standpoint,
while Turkey’s relations with the EU and its fading EU-oriented vision are seen
as shifting after new political alliances emerged in Turkey’s neighborhood following
2011.

            The
final section of the paper looks at hydrocarbons as an enabler for uninhibited
dialogue and reconciliation. It investigates how, when properly managed,
natural resources can reinforce peace building. Discussing how to best address
important issues that are relevant to post-conflict environments, the paper
warns that resource management initiatives in post-conflict countries must consider
a number of factors, including the type of resources involved, past, current
and potential future nexuses with conflict, both regional and international trade
patterns, and conditions that may have shaped resource management in the past. Evaluating the conditions
for regional cooperation on hydrocarbon development in the Eastern
Mediterranean, the paper focuses on a unique alignment of interests in the
region that is often overlooked because of the expected challenges in such
cooperation. A gas-hungry Turkey, the EU’s mounting want for imported gas,
Cyprus’s financial woes and thus its need to monetize its resources as soon as
possible, and Israel’s need for compound export options all create common
ground between the key players in regional politics.

Thus, the foundations for win-win
solutions are there to build on. The paper’s conclusion is that although political
vision and leadership to this end must come from within the region, the
foundations for regional cooperation will have to be supported and nurtured by
two critical external actors: the US and the European Union. Both have vested
interests in finding win-win solutions in the energy realm with positive
spillover effects on long-frozen regional conflicts.

 

 

 

 

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