Proposal-“bomb” that changes the facts – Indians: “To cooperate with Greece in the Eastern Mediterranean-To conduct joint researches for natural gas”!

Cooperation with Greece in the Eastern Mediterranean is proposed by one of the largest Indian Think Tanks!

The article in detail:

The international energy market has experienced severe turbulence since the Russian invasion of Ukraine in February 2022. Europe, which was heavily dependent on Russia for its energy security, is struggling to find alternative sources. Sanctions on Russia’s oil industry by the United States (US) and the European Union (EU) have led to a severe upheaval in global energy stocks, already teeming with shortages due to sanctions on Iran and Venezuela, the civil war in Libya and the debilitating impact of Covid-19 on claims.

This has sent global energy prices soaring, making post-pandemic economic recovery even more daunting, including in the US and European countries. Therefore, the OPEC+ decision on production cuts taken on October 5, 20221, provoked a strong reaction from President Joe Biden, who blamed Saudi Arabia, warning it of “consequences” for siding with Russia. The Kingdom, on the other hand, responded by underlining its longstanding commitments to global energy market stability and refusing political maneuvering.

While geopolitical tensions over global energy production and supply are unlikely to abate anytime soon, the current situation has highlighted the need to find alternative sources of energy. The search for alternatives has also been accelerated by growing international concern about global warming and environmental degradation. The focus is on finding alternatives both in terms of clean and renewable sources and newer producers and suppliers.

Natural gas, which compared to oil has less CO2 emissions, is projected as the “bridge fuel” for the energy transition in the twenty-first century. Regional hubs with potentially large gas fields such as the Caspian and Eastern Mediterranean have gained international attention. The case of the Eastern Mediterranean region is more interesting because of the way geopolitics has been shaping up in recent years leading to greater competition and cooperation between regional countries. The region has gained prominence as an alternative source of cleaner fuel, especially in the context of the Russia-Ukraine conflict.

Gas exploration in the Eastern Mediterranean

In the last decade, the Eastern Mediterranean has witnessed the discovery of some natural gas fields in the Exclusive Economic Zones (EEZs) of the peripheral countries, while further exploration and drilling activities continue. According to estimates contained in two United States Geological Survey reports published in 2010, vast energy reserves are deposited in both the Nile Delta and the Levant basins in the Eastern Mediterranean.

Further deposits are estimated in the Aegean and the Ionian Sea. Among countries in the region, Egypt and Israel have led the way with commercial drilling and pipeline supplies. Israel has invested in the Mari-B, Noa, Tamar and Leviathan gas fields, while Egypt has invested in the Zohr and Noor gas fields. Additionally, following the Israel-Lebanon maritime demarcation agreement, Israel is expected to start production at the Karish gas field, while Lebanon is likely to accelerate drilling at the Qana field. The success of Egypt and Israel in finding commercial quantities and starting production from onshore gas fields has encouraged others, such as Greece, Cyprus, Turkey, Lebanon, Libya and Syria, to take up exploration activities in earnest.

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The finds and the search for exploration have also caused disputes among regional countries over the claim of territorial waters, EEZs and parts of the continental shelf, leading to serious tensions, for example, between Turkey and Greece as well as between Turkey and Egypt. The signing of a memorandum of understanding between the Government of National Accord of Libya (GNA) and Turkey in November 2019 on the delimitation of maritime jurisdiction areas in the Mediterranean further escalated tensions. The two followed that with an agreement signed in October 2022 to jointly explore for hydrocarbons in Libyan waters, causing further turmoil among those opposed to the maritime agreement between the two countries.

At the same time, the possibility of the Eastern Mediterranean region emerging as a new natural gas production hub has led to efforts at reconciliation and joint exploration. For example, an informal bloc between Egypt, Israel, Greece and Cyprus took official form as the Eastern Mediterranean Gas Forum (EMGF) in 2019.8. EMGF, based in Cairo, aims to develop a cooperation mechanism between member countries to explore, develop infrastructure and supply gas to the European and Asian markets. Likewise, the potential economic benefits from gas production and exports encouraged Israel and Lebanon, which otherwise share no formal ties, to sign a US-brokered maritime demarcation agreement in October 2022.

Prospects for India

India’s energy needs are constantly increasing and are likely to grow exponentially in the coming decades due to the size and performance of its economy. India is the fastest growing major economy in the world and its energy needs are also growing faster than any of the G-20 economies. There is, however, a huge gap in India’s consumption-to-production ratio, which means that India has to depend on imports to meet its energy security needs. Conventionally, the Gulf region has been the mainstay of India’s energy security requirements, meeting 55-60 percent of its oil and gas needs in recent years. The Government of India is trying to diversify India’s energy basket both in terms of increasing renewables and cleaner sources such as natural gas, wind, solar and hydrogen, as well as finding alternative producers, including from Australia, USA, Russia, Latin America. and Central Asia. So far, however, New Delhi has made only limited efforts to explore the potential for natural gas imports from the Eastern Mediterranean region.

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There are several reasons why India may emerge as a favorable destination for supplies from the Eastern Mediterranean. First, India shares friendly relations with major regional countries, notably Egypt and Israel, both of which are keen to find newer markets for natural gas supplies. At this point, the majority of India’s natural gas imports come from Qatar and Australia. Given its emphasis on clean energy, New Delhi may explore imports from both Egypt and Israel’s natural gas fields. Both direct procurement and long-term supply agreements can be considered.

Indian oil companies may also seek participation in exploration activities that can secure long-term supplies for India. Apart from Egypt and Israel, India can also explore the possibilities of cooperation with Greece and Cyprus in gas exploration which can be profitable in the future. Problems related to logistics and transport can also be overcome since India used to secure supplies from Libya before it got embroiled in civil war. Further investment in infrastructure developments can be explored through micro-participatory initiatives such as I2U2 and jointly with friendly regional and international powers, including the UAE and France, with an interest in the Eastern Mediterranean.

Conclusion

At a time when India’s energy security needs are ever increasing, it is worth exploring possible newer sources to provide cleaner sources of energy. The Eastern Mediterranean has emerged in recent years as an important hub for gas exploration with major discoveries in the Nile Delta and Levant basins. While this has caused regional tensions, given competing claims to maritime jurisdiction in the Mediterranean Sea, it has also resulted in cooperation between regional countries for joint exploration and infrastructure development. For India, despite regional problems, the Eastern Mediterranean offers strong prospects as a source of natural gas imports due to its ever-increasing demands and strong bilateral relations with countries in the region such as Egypt, Israel, Greece and Cyprus. At the same time, for countries in the region, India offers a lucrative option as an export destination given India’s huge and growing appetite for energy.

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