The Political and Economic Challenges of Energy in the Middle East and North Africa by David Ramin Jalilvand & Kirsten Westphal

Author:David Ramin Jalilvand & Kirsten Westphal [Jalilvand, David Ramin & Westphal, Kirsten]
Language: eng
Format: epub
ISBN: 9781138706224
Google: gjbEAQAACAAJ
Goodreads: 34703271
Publisher: Routledge
Published: 2017-11-22T00:00:00+00:00

10 The Eastern Mediterranean

An energy region in the making

Charles Ellinas

Introduction

In recent years, the Eastern Mediterranean has experienced some major gas discoveries, with potentially more to come. At the same time, the region is also going through major geopolitical challenges. All of this is happening amid fundamental changes in global energy markets, including changes in the way oil and gas are produced and traded as a result of very low prices and the impact of renewables, dynamics which are anticipated to last over the long term.

The prospects for significant increases in oil prices, which would allow more expensive reserves to be produced, are being dashed by the combination of global oversupply and weak demand, coupled with climate change mitigation. The advent of new technology, shale oil/gas and renewables, also means that the world is entering an era of “plenty”. This will entail long-term structural changes in the oil and gas industry, as prices are likely to remain low for a long time to come.

The form of energy most relevant for developments around the Eastern Mediterranean is natural gas, which will be the focus of this chapter. The major gas discoveries shaping views about the Eastern Mediterranean are summarized in Table 10.1 and Figure 10.1.

The discovery of substantial natural gas fields in the Eastern Mediterranean starting in 2009 raised huge expectations in the region and to some extent in the EU. The emergence of the Eastern Mediterranean as a gas-rich region is a new development in international energy. In terms of developing, marketing, and exporting the gas, key options under consideration include regional markets, pipeline exports, and LNG, all of which contribute to the formation of a “region”.

Table 10.1 Major natural gas discoveries in the Eastern Mediterranean

Gas field Probable reserves (bcm) Discovery date Status

Tamar – Israel 280 2009 Producing

Leviathan – Israel 620 2010 Pursuing gas sales

Aphrodite – Cyprus 127 2011 Pursuing gas sales

Zohr – Egypt 845 2015 Being developed

Source: Authors’ compilation.

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