50 International The EconomistAugust 22nd 2020
21suitable for shipping around the world.
Shared gas interests have also fostered
unlikely collaboration. Leviathan’s gas
serves not only Israel but Jordan and Egypt.
Leviathan’s developers, America’s Noble
Energy and Israel’s Delek Drilling, have tak-
en minority stakes in the pipeline that
serves Egypt. They plan to export 18.4mcm
a day of Israeli gas to Egypt by mid-2022.
Yet ten years after Leviathan’s discov-
ery, the economics of eastern Mediterra-
nean energy are shakier. Oil and gas com-
panies, under pressure from investors,
were cutting capital spending even before
covid-19 punctured energy demand. The
price of gas is almost half what it was in- Chevron in July said it would buy No-
ble for a bargain $5bn. ExxonMobil, Total
and Eni have delayed further drilling off
Cyprus, as the firms slash spending and
struggle to deploy crews in the pandemic.
Club Med
The scramble for resources and how best to
exploit them is aggravating international
tensions. That is partly because of the awk-
ward history and geography of the eastern
Mediterranean. Greece argues that each of
its scattered islands, however small, is le-
gally entitled to its own continental shelf
with sole drilling rights. Turkey, hemmed
into the Aegean by a forbidding archipelag-
ic wall of those islands, counters that the
eastern ones rest on Turkey’s continental
shelf and refuses to accept that they gener-
ate economic zones around them. It is one
of only 15 countries, including Israel and
Syria, that have refused to join the unCon-
vention on the Law of the Sea, which large-
ly supports Greece’s case.
Turkey, which has been increasingly at
odds with its Western allies over a number
of issues, from illiberalism at home to mi-
gration flows into Europe, is also the only
country to recognise the breakaway repub-
lic in the northern third of Cyprus and
therefore the legitimacy of its waters. It in-
sists that any exploitation of energy re-
sources in the region must take into ac-
count Northern Cyprus. To back up these
demands, it has sent exploration ships
with naval escorts into Cypriot waters and
those of Greek islands, most recently
around Kastellorizo, close to Turkey’s
mainland (see map).
“Let those who come to the region from
far away, and their companies, see that
nothing can be done in that region without
us,” boasted Turkey’s foreign minister last
year. In the past couple of years, Mr Erdo-
gan’s government has embraced a revanch-
ist doctrine known as the Blue Homeland,
which seeks to give Turkey control over the
waters of the eastern Aegean and the north-
ern Mediterranean, disregarding every
Greek island from Samothrace to Rhodes.
Turkey has discovered no new Mediter-
ranean gas of its own (though as The Econo-mistwent to press, there were reports it
may have done so in the Black Sea). But it
too aspires to become an energy hub
through the Trans-Anatolian pipeline (ta-
nap), which can deliver up to 16bcm from
Azerbaijan to Turkey and Europe each year.
Turkey plans to increase the pipeline’s ca-
pacity to 61bcm. “The problem is that Azer-
baijan does not have enough to fill that,”
says Michael Tanchum of the Austrian In-
stitute for European and Security Policy.
“Turkmenistan has among the world’s larg-
est volumes of gas, but Russia and Iran
keep preventing pipelines from there,”
says Mr Tanchum. “So if you’re thinking
where Turkey can get gas that Russia can’t
interfere with, that’s Iraqi Kurdistan or Is-
rael or the eastern Mediterranean.”
Others in the eastern Mediterranean
have snubbed Turkey, however. In January
Greece, Cyprus and Israel signed a deal to
build a 1,900km undersea pipeline to carry
10bcm of natural gas a year (around a tenth
of the eu’s needs) to Europe, bypassing
mainland Turkey. The viability of the plan
is questionable. The pipeline would travel
at extraordinary depth—3km below the
surface in one stretch—as well as through
areas of seabed prone to earthquakes. In-
dustry analysts reckon its projected cost of
$6bn-7bn is optimistic.
To help settle these questions, the re-
gion is getting organised—without Turkey.
In January Cyprus, Greece, Israel, Italy, Jor-
dan and Palestine established a bloc called
the East Mediterranean Gas Forum. France
has applied for membership, America for
observer status. The forum has taken on an
increasingly Turkosceptic tenor as many of
its members lock horns with Turkey over a
host of issues beyond energy.“A decade ago the question was whether
these gas discoveries would help to over-
come political conflicts, or whether they
would exacerbate political conflicts”, says
Sir Michael Leigh, who served in the Euro-
pean Commission from 2006 to 2011. “It’s
pretty clear that it’s more the latter than the
former now. The gas issue has fed into oth-
er conflicts. And what we’re seeing is very
largely a result of the standoff over Libya.”The Libyan connection
For years, Libya has been riven by civil war
between a un-recognised government in
the west and the forces of Khalifa Haftar, a
renegade general, in the east. Turkey sup-
ports the government, which works with
Islamist militias, whereas France, Egypt,
the United Arab Emirates (uae) and Russia
have aided General Haftar, who last year
came close to seizing Tripoli, the capital.
Though it now claims to be taking a neutral
stance, France, which is battling jihadists
in Mali, views the general as a useful bul-
wark against extremist forces. Total,
France’s largest energy company, has in-
vestments in Libyan oilfields controlled by
him. French anti-tank missiles were found
at one of the general’s bases last summer,
though France denied sending them.
In January Turkey halted General Haf-
tar’s offensive by sending arms, troops and
thousands of Syrian mercenaries to beef up
the government in Tripoli. That prompted
a crisis in June, when a French frigate, oper-
ating as part of a natomission, was threat-
ened by a trio of Turkish naval vessels
while inspecting a ship suspected of break-
ing the unarms embargo on Libya.
Mr Erdogan’s intervention in Libya
starkly illustrated how energy and securityCreteRhodesAegean
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Sources: S&P Global; Petroleum Economist; MarineTraffic.com *AtAugust19th 2020GasfieldLNG plantsCyprus gas drilling blocks Licensed Unlicensed