This paper was written for the Natural Resource Governance Institute (NRGI).
Over a decade after the first major gas discoveries in the Levant Basin, and a year after a first meeting in Cairo on 14 January 2019, representatives of Cyprus, Egypt, Greece, Israel, Italy, Jordan and the Palestinian Authority met for a third time in Cairo on 16 January 2020 to finalize the framework for launching the East Mediterranean Gas Forum (EMGF) as an international intergovernmental organization based in Cairo. In addition to representatives from the seven founding members, the January 2020 ministerial meeting was attended by representatives from the European Union (EU) and the World Bank, as well as representatives from France and the United States who requested to join the forum, respectively as a member and as a permanent observer.
The discovery of sizable natural gas reserves off the coasts of Cyprus, Egypt and Israel over the past decade, and the potential for more discoveries to come, has turned the spotlight on the Eastern Mediterranean, a geographic space that is being increasingly referred to as such, a subregion with its own set of players, stakes and rivalries.
In 2010, the United States Geological Survey estimated that the Levant basin and Nile Delta basin could hold a mean of 122 and 223 trillion cubic feet of recoverable gas respectively. On paper, the combined estimates have the potential to turn the Eastern Mediterranean into an energy hot spot. In reality, and while sizable reserves have been developed, the past decade has also revealed considerable challenges in exploiting part of this newly found resource wealth.
These challenges are multidimensional. Much of these reserves, particularly those off the Israeli and Cypriot coasts, were discovered in deep waters and are complex and expensive to extract. Insufficient infrastructure, limited local markets and geopolitical tensions add to these challenges. At times, the management of the sector at a national level may have also contributed to further complicating the monetization process.
Future exploration activity – since much of the region’s resources have yet to be discovered – depends on enhancing monetization capabilities. EMGF’s establishment responds to the need for a regionally coordinated effort to unlock the full potential of the Eastern Mediterranean offshore gas wealth.
The paper starts by providing a quick overview of the EMGF, its objectives and internal working mechanisms, and its first efforts to assess– with the aim of improving– prospects for monetization. It then explores the geopolitical dynamics with a focus on mapping perceptions of threats emanating from various regional actors, as these dynamics have played a role in the establishment and membership of the Forum. In the third and last part, the paper focuses on bringing offshore Eastern Mediterranean gas to market.