The Ishai-Aphrodite reservoir: A winning card of bilateral cooperation

The Regional Gas Forum, established two years ago in Cairo and which consists of seven members, is a fascinating illustration of the common interests formed in the region. These are Egypt, Israel, Greece, Italy, Jordan, Cyprus and the Palestinian Authority. Israel is rightly entitled to observe these developments with great satisfaction.

In recent months, most of the members have ratified the forum’s constitution, as did Israel last week. Energy Minister Yuval Steinitz stressed, after approval by the government, that the gas discoveries encourage “historic cooperation” with Arab countries and Europe that will continue to expand. This forum is also supported by the US and the EU. France has requested to join as a member, and recently the UAE has joined as an observer.

Turkey is interpreting the regional organization as intended to constrict its steps and exclude it from the energy potential in the region. Therefore, Turkey is pursuing an assertive foreign policy whose purpose is to convey a clear message that it cannot be ignored. In the past months, tensions in the region have even increased, especially between Turkey and Greece. Following intensive mediation, the two countries initiated an “exploratory discussion” on the 25th in order to defuse the tension, though there are no high expectations for an immediate breakthrough.  

In any case, an Israeli-Cypriot agreement regarding the development of the Ishai-Aphrodite gas field can be an important milestone for the unique circumstances created in the region.

The reservoir, which was discovered about 10 years ago, is a cross-border field between Cyprus and Israel, most of it on the Cypriot side and the rest on the Israeli side. In December 2010, the two countries signed an agreement demarcating the maritime border between them. As part of the agreement, they agreed to cooperate in the development of cross border gas fields yet to be discovered. A year later, the field in question was discovered. The two countries agreed indeed that this was a cross-border field, and it remained to be determined the exact part of each country. 

This is a common process in the global energy market, which is resolved in most cases within different forms of agreements between the countries and the relevant energy companies. In April 2014, Israel and Cyprus even signed another agreement, regarding the sharing of relevant information collected during the drilling of the field, in order to help determine the share of each of the countries. 

HOWEVER, SINCE then and despite numerous discussions, there has been no real progress. Moreover, Cyprus has taken a number of very significant steps, indicating that it intends to move forward in the development of the field, even before an agreement between the two countries. These actions were received with surprise on the Israeli side, especially considering the close relationship between the two countries, and the assumption that these are common disputes that are settled in recognized procedures, certainly between friendly countries.

In the current regional circumstances, with the strategic relationship existing between Israel and Cyprus, an agreement around the gas field in question serves the interests of the two countries, and the outline of regional cooperation that has been formed in recent years. The export option of this field is most probably toward Egypt. 

The reasons are obvious: First, the completion of the agreement and the implementation of the commercial potential of the field, will illustrate well the results of the regional cooperation that has been created in recent years in a region better known for its instability. It can be a concrete example of the “fruit of peace,” which at times is reluctant to follow extremely important strategic agreements.

Second, as mentioned, Israel and Cyprus share a close and warm relationship. It is very surprising, therefore, that it is precisely these countries that are failing to resolve a largely common and technical issue. This puzzlement only intensifies in light of the recent negotiations between Israel and Lebanon, albeit challenging and difficult in light of the complex relationship between the two countries, which is likely to also address the issue of cross border fields expected to be discovered later. An Israeli-Cypriot agreement will send an encouraging and vital message, especially in a region as the Middle East.

Third, such an agreement would send a positive message to the new administration in the White House. Actually, the more pragmatic voices that are heard in recent days from Ankara need to include willingness, although conditional, to improve the dialogue with Israel, should be seen as a welcoming message toward Washington. And of course, let us not forget, that the company “Chevron,” one of the owners of the field, has recently joined the Eastern Mediterranean Club.

The COVID-19 crisis has hit the global energy market substantially. International energy companies will now have difficulty investing the amounts necessary to develop gas and oil fields. The Ishai-Aphrodite reservoir is in a relatively advanced stage. This fact, in addition to its expected purpose for the regional market, may help to realize its clear potential, both economically and politically-strategically.