Gas finds complicate eastern Mediterranean security

From IISS, Volume: 2013; Edition number: 15; Date: 15 May 2013:
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The discovery of natural gas has complicated rivalries in the eastern Mediterranean, an area already full of long-standing security issues.

Among those to have issued assertive statements of intent regarding undersea gas finds are Greece and Turkey, Cyprus and the self-declared Turkish Republic of Northern Cyprus, as well as Israel, the Lebanese militia group Hizbullah and ....Hamas.

The complex nature of the overlapping claims, history of conflict in the region and potential riches available to cash-strapped nations make it more difficult to resolve the various disputes. As such, the eastern Mediterranean now presents a long-term security dilemma for regional states, complicated by the convulsions of the Arab spring and the interests of extra-regional powers.

Israel and its neighbours

Given a history of enmity and occupation, and the fact that Israel has got the furthest in exploiting the new resources, it is unsurprising that the relationship between Israel and its neighbours over natural gas finds is already strained.
Israel’s gas bonanza began when US firm Noble Energy and Delek Energy, a domestic company, discovered gas off the country’s coast in 1999. The Mari-B field, which began production in 2004, contained approximately 1 trillion cubic feet (tcf) of gas but is now severely depleted and likely to run dry within two years. Other nearby fields, such as Noa and Pinnacles, are now connected to the Mari-B platform and began production in June 2012 – they are thought to hold a further 1.2tcf of gas.
The relative importance of these fields has declined with the discovery of much larger fields in the north of Israel’s exclusive economic zone (EEZ). In January 2009, the discovery of the Tamar gas field was announced. Though it had been sold by BG Group of the United Kingdom for just one US dollar in 2005 to Noble Energy, it now has a reserve estimate totalling 10tcf and went into operation on 30 March. Just months after the initial Tamar discovery, Noble announced another find: the nearby Dalit field contains an estimated 0.5tcf of natural gas. Most important of all has been the discovery in June 2010 of the as-yet unexploited Leviathan field, which has estimated recoverable reserves of 18tcf.
These discoveries have transformed Israel’s energy calculus. In 2012, when Egypt abruptly cancelled natural gas exports to Israel, the country was reliant on imports for 70% of all natural gas used, and on its Arab neighbour alone for 40% of its supply. But the Tamar and Dalit fields alone hold enough natural gas to supply all the country’s needs for two decades. When combined with Leviathan, Israel could meet all of its electricity needs and export gas to Europe – a significant strategic shift.
However, given its often fractious relationships with its neighbours, Israel’s gas finds have also heightened its security concerns. Lebanon, for example, initially claimed that the Leviathan field ran into its EEZ – but appeared to have dropped the claim in its submission to the United Nations of its EEZ in August 2010. However, it did highlight a 250-square-nautical-mile area of waters disputed with Israel, an indication of the legal and political difficulties that could arise if a cross-boundary field were discovered.
Reflecting concerns over potential maritime disputes over these waters, Israeli Minister of National Infrastructure Uzi Landau in July 2010 stated: ‘We will not hesitate to use our force and strength to protect not only the rule of law but the international maritime law.’ Hizbullah leader Sheikh Hassan Nasrallah issued a warning to Israel in July 2011 ‘against extending its hands to this area and steal[ing] Lebanon’s resources from Lebanese waters … Whoever harms our future oil facilities in Lebanese territorial waters, its own facilities will be targeted.’
To its south, Israel has a difficult relationship with Hamas and the Palestinian Authority (PA) over natural gas, and has been obstructive to the PA’s own natural gas exploitation opportunities. Gas was discovered in 2000 by BG in waters that would comprise Gaza’s EEZ. However, political difficulties made it impossible to tap and transport the gas – not only is the PA not a member of the UN Convention on the Law of the Sea (UNCLOS) and hence has not declared its EEZ, but Israel occupied the Gaza Strip until 2005 and holds de facto control over the waters off Gaza’s coast. The situation has led to harsh criticism from Gaza: in 2007, Hamas’s then economic minister Ziad al-Thatha denounced Israeli negotiations with BG as ‘an act of theft’ and compared them to ‘a modern-day Balfour Declaration’. That same year, BG withdrew from the negotiations, although they were briefly resumed in 2008 and rumours about possible negotiations persist.

Greek drama

Beyond Israel, the most active country in gas exploration has been Cyprus. Nicosia was eager to negotiate its EEZ boundary with Israel (having already done so with Egypt in 2003), and reached an agreement in December 2010. A year later, the substantial Aphrodite field was discovered in Cypriot waters, just 35km west of the Leviathan field. The estimated reserves of up to 8tcf would more than cover Cyprus’s entire energy needs for many years to come.
Nicosia’s determination to proceed unilaterally has, though, concerned Turkey, which would prefer to see a revenue-sharing agreement with Northern Cyprus. Ankara has taken a number of steps in response. In September 2011, it signed a continental shelf delimitation agreement with Northern Cyprus, whose president, Dervis Eroglu, described it as ‘a precautionary measure to make our Greek counterparts desist’. The agreement would theoretically allow Turkey to drill off the island’s southern coast, an activity that would be strenuously opposed by Nicosia. Following the delimitation agreement, Turkish Prime Minister Recep Tayyip Erdogan described Nicosia’s exploratory drilling as ‘nothing but sabotage of the negotiation process between Turkish Cypriots and Greek Cypriots’. In April 2012, state-run Turkish Petroleum began exploratory drilling off the northern Cyprus coast. In March 2013, Turkey severed ties with the Italian company ENI over the latter’s signature of exploratory drilling licence agreements with Cyprus.
Turkey is also locked in a rivalry with Greece over the region’s hydrocarbon reserves. In February, Greece submitted a note to the UN protesting against ‘Turkey’s granting of exploration permits for areas of the Greek continental shelf’. Turkey responded with its own note claiming that all licences were within Turkey’s continental shelf.
The continental shelf disagreement between the two countries dates back to the 1970s. The situation is complicated by the vast number of Greek islands (there are more than 2,400 Aegean islands, mostly Greek) and the proximity of some of these to the Turkish coastline: the closest Greek island lies just 1.3km from the Turkish coast. Since 1936, Greece has claimed just six nautical miles of territorial waters around its Aegean islands, but reserves the right to claim 12 miles, as is stipulated under UNCLOS. Such a move by Greece would increase the percentage of the Aegean claimed as its territorial waters from 43.5% to 71.5%. Turkey’s parliament stated in 1995 that a move by Greece to extend territorial waters to 12 nautical miles would be a justification for going to war. Neither Greece nor Turkey has submitted a formal claim for an EEZ to the UN, and Turkey has not signed UNCLOS.
Ambiguity over territorial waters and the inability to agree on a delimitation of the continental shelf has created great confusion over legitimate economic exploitation rights, and heightened military tension. This is not a new issue: the two NATO allies narrowly avoided a military crisis over drilling in 1987, when Ankara gave assurances that it would avoid disputed waters. Like Cyprus, Greece sees exploitation of offshore hydrocarbons as a potential way out of its crippling fiscal and economic crisis. Given this motivation, Greek Prime Minister Antonis Samaras stated in February that ‘Greece has the right, by the Law of the Sea, to declare an EEZ whenever it wants.’ A declaration of an EEZ would enable legal exploitation of any oil and gas discovered, but would lead to immediate tension with Turkey.

Naval rivalry

Amid rivalries over hydrocarbons, regional states have been engaging in gunboat diplomacy and naval procurement to stake their claims and deter adversaries.
In September 2011, Erdogan noted that Turkish ships ‘will be seen much more frequently in those waters. Israel will not be able to move in the eastern Mediterranean as it wishes.’ Erdogan’s statement was partially intended to reflect Turkish intentions around Cypriot gas exploration, but it was also meant as an expression of Ankara’s displeasure over the UN’s report into the Israeli raid in 2010 on a Gaza-bound flotilla that killed nine Turks. In response, in November 2011 Israel admitted that it had increased its naval patrols of the Leviathan and Tamar fields to match those of its Mari-B and Noa fields, in order to protect platforms from state and non-state threats.
With a newfound focus on maritime security, eastern Mediterranean states are also keen to modernise their navies and coastguards. Israel, for example, announced in July 2012 that it would spend $800 million on acquiring four offshore patrol vessels to protect its platforms and enforce maritime security. Turkey, meanwhile, has a number of naval procurement projects, including 16 Tuzla-class patrol craft for the navy and four Dost-class offshore patrol vessels for the coastguard. The most substantial Turkish procurement is for a $1.7 billion landing helicopter dock, the navy’s first amphibious assault vessel.
Two other claimants, Greece and Cyprus, are hamstrung in procurement efforts by lack of funds. Inspired by the gas finds, however, Nicosia finally gave the go-ahead for the procurement of two offshore patrol vessels in January, with a likely budget of $150m (although it is unclear how the country’s financial crisis will affect this programme). Greece, meanwhile, with a defence budget constrained by a political decision to stick with the purchase of six submarines from Germany, has resorted to unusual deals to bolster its Mediterranean presence. In February, Athens sought to lease two frigates and four maritime patrol aircraft from the French navy in order to better patrol the eastern Mediterranean.

Unstable elements

Developments in recent years, therefore, paint a picture of regional discord driven by energy discoveries and fuelled by naval modernisation. However, the fundamental security issues in the eastern Mediterranean existed long before natural gas was found.
The combination of Israel’s difficult relationship with its neighbours, a legacy of conflict in Gaza and southern Lebanon, the unclear international situation of both Gaza and Northern Cyprus and the Greece–Turkey rivalry: all these date back decades. The recent hydrocarbon finds are thus catalysing long-running security issues, rather than creating new ones. Potential disputes about gas also seem largely containable, owing either to an asymmetry of military power between Israel and its neighbours, or to membership of NATO or the European Union, which should encourage negotiation rather than confrontation.
Nonetheless, the multiple disagreements and disputes underline the political fragility of the eastern Mediterranean. It is only because the recent hydrocarbon finds have each been contained within a single entity’s claimed EEZ that greater confrontation has not arisen. The possibility of a cross-boundary hydrocarbon deposit would greatly complicate the security situation in the region. The possible expansion of Greece’s maritime zones would also upset its precarious balance with Turkey.
Other security issues also exist. The effects of the Arab spring have highlighted the dangers of ungoverned maritime space. With conflict in Syria and the possibility of greater instability in Egypt, it is conceivable that their maritime zones could be utilised by non-state groups. Meanwhile, the presence of the Russian navy in the Mediterranean, where Moscow announced in March that it would create a permanent task force of up to six warships, and its good relationship with Nicosia, add a further level of extra-regional involvement in and around the sea.
NATO already has a significant presence in the Mediterranean, with Standing Mine Countermeasures Group 2 and Standing Maritime Group 2 rotating through the region’s ports (command for these groups was moved from Naples, Italy, to Northwood, UK, in March 2013) and Allied Land Command to be based in Izmir, Turkey.
Natural gas, combined with an overseas energy dependency in Israel and economic crisis in Greece and Cyprus that is encouraging the rapid development of these resources, has complicated and promoted the various security concerns in the region. The long-running rivalries within the region now have an additional driver, arguably making them more difficult to resolve.