Tuesday, April 2, 2013

Cyprus and the emerging Mediterranean gas wars

The bizarre drama currently playing out over a Cyprus “bailout/bail-in” has another entire dimension. That is a behind-the-scenes battle for control of the expanding EU natural gas market over the coming decades.

For more than a century a major background factor in numerous wars across the globe has been the control of oil. Now, with governments across Europe trying to lower their “carbon footprints,” gas and wars over control of gas are emerging.

The bizarre conflict over Cyprus and Greece, as well as Syria, have more than a little to do with the new gas wars geopolitics.

In December 2011, Texas’ Noble Energy, found a field offshore Cyprus estimated to hold at least 7 tcf of natural gas. Noble Energy found huge gas reserves offshore Israel in 2010, giving Israel for the first time the prospect of becoming a major gas player too. Now the plot thickens.

Qatar, a major backer of the toppling of the Assad regime in Syria has a vested interest there related to gas. Qatar has bid to become the world’s premier LNG gas exporter. Its North Field is contiguous to Iran’s South Pars gas field in the middle of the Persian Gulf. Qatar at the moment is backed by Turkey against Assad’s Syrian regime.

Now, a major motivation to both want Assad off the map, and chaos in Syria might just be that in July 2011, Syria, Iran and Iraq signed a $10 billion agreement for a gas pipeline from Iran’s Port Assalouyeh near South Pars to Damascus, Syria via Iraq. Iran plans to extend the pipeline from Damascus to Lebanon’s Mediterranean port where it would be delivered to EU markets.

Adding to Qatar’s determination to destroy the Syria-Iran-Iraq gas cooperation is the discovery in August 2011 by Syrian exploration companies of a huge new gas field near the border with Lebanon and at Tartus on the Syrian Mediterranean. Any export of Syrian or Iranian gas to the EU would go through the Russian-tied port of Tartus.

According to informed Algerian sources, the new Syrian gas discoveries, are believed to equal or exceed those of Qatar.