The Eastern Mediterranean is a famously crowded and complex place and most of its international maritime boundaries remain unsettled. It will take time to muster the political will and popular support necessary for talks and other interactions to proceed. But that only highlights the necessity of starting work on solutions today, not tomorrow. UNCLOS provides most of the necessary tools—legal foundations, proved mechanisms, and a continuously updated LOS Atlas—so it constitutes a logical starting point from which effective energy diplomacy can be used. UNCLOS can promote multilateral dialogue, resolve or successfully manage competing claims, and give all concerned a chance to share in the proceeds.
One of the doors to shared prosperity can only be unlocked by unshackling Cyprus from its troubled past. Given its central geographical location in the region, its relatively low land prices, and its friendly relations with most neighboring countries, Cyprus is clearly the most logical spot to host a major new hub for the gathering, processing, and distribution of Eastern Mediterranean gas. Pipelines from the island to Greece, Italy, and Turkey would give current and future regional producers seamless access to the southern littoral of the Eurasian mainland. LNG carriers would enjoy minimal sailing times to Egypt’s Suez Canal, and therefore to growing markets in East Africa and South Asia. Cyprus also is closer to the Mediterranean’s western exit at Gibraltar than Syria, Lebanon, Israel, or Egypt.
The Stakes
In addition to the world-class formations already discovered, exploration of the Eastern Mediterranean seabed is expected to yield more finds in the coming years. This has led to heated disputes, including overlapping claims between Greece and Turkey, Cyprus and Turkey, Syria and Turkey, Lebanon, and Israel. Given these dangerous realities, it only makes sense for anyone interested in the region’s stability to familiarize themselves with the principles and mechanisms by which such disputes are resolved and with the likely outcomes if and when conflicting claims are put to a legal test. This book proposes a fair, unbiased, and equitable solution for each of the Eastern Mediterranean’s seven coastal countries. It attempts to set out the likely extent of its eventual maritime boundaries vis-à-vis those of its neighbors, taking into account the usual legal/diplomatic methods by which competing claims are resolved. For each of the boundaries at issue, there is a “way forward” scenario by which the interlocutors can accomplish this peacefully, arriving at neutral and equitable solutions by following the same by-the-book methodology relied upon by UNCLOS, as well as by international courts and tribunals, whether for adjudication or arbitration.
It would be difficult to overstate the stakes. In addition to the special case of Gaza, the Eastern Mediterranean is rimmed by seven coastal states—Cyprus, Egypt, Greece, Israel, Lebanon, Syria, and Turkey—with an overall Maritime Frontier Area of 464,637 square kilometers, relative to 21 states and 2.5 million km2 for the Mediterranean as a whole. The latest and most reliable estimates suggest that the Eastern Mediterranean contains more than USD 50 trillion worth of oil and gas, primarily the latter. Despite the promise of so much lucre, only two genuinely major discoveries have been made in recent years, both now on track to the development stage. These are Leviathan, discovered off Israel in December 2010 and reported to hold over 22 trillion cubic feet in gas reserves, and Zohr, discovered off Egypt in August 2015 and reported to be even larger at 30 TCF. To put matters in perspective, Zohr’s proven reserves alone are estimated to be worth USD 150 billion.
Under UNCLOS’ Guidelines and Rules of Procedure, the Eastern Mediterranean region currently has 12 main maritime boundaries to define in order to delineate the offshore spaces among the seven coastal states fully. Of these, only two (Cyprus-Egypt and Cyprus-Israel) have bilateral treaties, leaving 10 (or 83%) of the region’s maritime boundaries unresolved and in dispute. As of June 2019, all seven coastal states in the Eastern Mediterranean had some active offshore hydrocarbon industries totaling 231 defined oil and gas blocks covering a maritime area of 238,135 km2, representing about 51% of the region’s total offshore waters. Of the present-day blocks expected to be put on offer, up to 36% can be classified as “contentious” due to the uncertainties regarding the precise locations of the relevant maritime boundaries.
Unless the ambiguities surrounding the vast majority of these boundaries are satisfactorily resolved, future economic development stemming from seabed hydrocarbon discoveries and exploitation will be negatively affected, inevitably reducing overall revenue for the entire region. And it is not just finding and extracting the resources that will be hampered, the continuing absence of officially delineated maritime boundaries also would impair the construction and operation of underwater pipelines. In this context, the recently proposed pipeline that would carry Israeli gas 2,000 kilometers from Cyprus to Italy (via Crete and the Greek mainland) may be a nonstarter. Feasibility mapping shows that the route crosses un-treatied boundaries, including one contested between Greece and Turkey, rendering it unworkable unless and until the multiple parties reach resolution.
The urgency attaching to boundary delineation cannot be fully appreciated unless one understands the long-term social and economic potential for offshore hydrocarbon resources in the Eastern Mediterranean. Notwithstanding the partial exceptions of Cyprus and Israel (already tapping some of its undersea resources on a considerable scale), the economies of all seven coastal states suffer from various degrees of under-development, inadequate transport and infrastructure problems. For all of these countries—but especially the smaller ones with modest populations—the emergence of thriving hydrocarbon sectors could have impacts that are nothing less than historic, on multiple levels. The mere prospect of the resulting revenues makes any country more attractive to investors, the auctioning of oil and gas blocks strengthens government coffers, and even the earliest stages of exploration start spinning off new opportunities for companies engaged in support activities, creating new jobs for local applicants.
Once extraction begins, the country in question can often realize substantial savings on its energy bills because its import needs would be reduced or eliminated. Once that happens, the entire economy can benefit from lower electricity rates, lower production costs, and lower transport bills, leading to lower input costs across virtually every sector. By its very nature, this kind of broad savings increases the competitiveness of the economy, typically leading to more exports and therefore more growth, itself serving to provide momentum toward self-sustainability. And this is just the beginning because once the country starts to sell its oil and gas abroad, the resulting revenues open up whole new possibilities for its people. In a region long stymied by low development levels that reinforce poverty and inequality, and by persistent tensions that contribute to higher defense and security costs, well-managed hydrocarbon revenues would be a genuine game-changer. In the big picture, such revenues give governments more options to effectively match their priorities with their capabilities without having to sacrifice long-term interests in order to deal with short-term crises. With good governance, these kinds of effects can significantly improve even the tightest of fiscal situations.
It is on the spending side that wise leadership can make the most of a hydrocarbon windfall. Having such resources allows governments to shift the national economy into a permanently higher gear by investing in the platforms that make any society healthier, wealthier, better-educated, and more productive. These kinds of investments also generate greater efficiency, more predictability, and enhanced competitiveness. Best of all, they create conditions in which poverty can be sharply reduced or even eliminated, allowing a society to work for all of its members rather than a select few.
There is, however, no time to waste, as evidenced by mounting tensions across the area that have led to the increasing presence of outside naval forces in the region over the past few years. The potential for mounting tensions to spin out of control has been demonstrated with increasing regularity. In June 2019, for example, Cyprus announced that it had issued arrest warrants for any crewmembers working on a Turkish drilling ship operating in Cypriot-claimed waters off the island’s southwest coast. Turkey responded by dismissing the warrants as “null and void,” but it also sent an ominous warning that if any crewmembers were arrested, there would be a “necessary response.”
Figures
All of the referenced figures are provided using science-based suggested