Israel's Energy Discovery: Game-Changer?

One of the most remarkable -- perhaps game-changing -- developments in the Middle East has been the discovery of massive natural gas deposits in the eastern Mediterranean. Will this transform Israel into a wealthy energy-exporting state? Will it produce more conflicts in the area given conflicting claims by Cyprus, Israel, Lebanon, and Turkey?

Few people are better qualified to analyze these issues than Amiram Barkat -- an Israeli journalist working at Globes.

Amiram, please discuss Israel's natural gas exploration in the eastern Mediterranean. What has been found so far? What is expected to be found?

Israel had traditionally been perceived as a country bereft of natural resources: "Our only resource is in our brains," the country's leaders used to say. Throughout the years many attempts were made to find oil. From Israeli government companies to devout Christians following clues in the Bible and deeply convinced that the Land of Milk and Honey had to also be the land of oil. Some 400 drillings were made during the years; practically all of them ended in failure.

It turned out that the entrepreneurs were not completely mistaken. They were just not looking in the right places: Israel's natural resources are offshore and require state-of-the-art deep-water drilling equipment to be extracted. The first discoveries were made in the late 1990s, but the two most significant are quite recent: the Tamar (2008) and Leviathan (2010) natural gas reservoirs.

If expectations regarding the Leviathan field are confirmed, what will this mean for the Israeli economy?

The Tamar reservoir holds enough natural gas to provide for Israel's needs for 20-25 years. It will enable Israel to convert most of its power stations from oil and coal-fueled to natural gas-fueled. Leviathan, considered the world's biggest offshore discovery in the last decade, is almost twice the size of Tamar. Moreover, Leviathan could also include a significant oil reservoir; an exploratory drill to check is planned for early 2012. An oil discovery would be of great significance for the whole region.

Hizballah and Lebanon are disputing the northern boundaries of Israel's territorial waters. Where does this matter currently stand?

In 2009 following the Tamar discovery, Hizballah claimed that the reservoir is situated in Lebanese waters. A year later the claim was remade regarding the Leviathan reservoir. Hizballah's claims were echoed by important political figures in Lebanon, and in 2010 Lebanon filed a complaint with the UN claiming that Israel violated its sovereignty by de-facto annexing a maritime area of some 850 square kilometers.

How does Turkey come into the picture?

Until now, Turkey had no official position regarding Israel's offshore activities. It is rumored that Turkey quietly supports Lebanon's claim in the maritime border dispute with Israel. If true, this has more to do with Turkey's policy toward Cyprus [part of which it rules] than with Israel. The Lebanese claim with regard to Israel is based on the maritime delimitation line agreed between Lebanon and [the ethnically Greek republic of] Cyprus. In January 2007, Cyprus signed an Agreement on the Delimitation of Exclusive Economic Zone (EEZ) with Lebanon. The agreement, however, hasn't been ratified by the Lebanese parliament. Turkey strongly objects to international recognition of a Cypriot EEZ, which contradicts its own claims in the east Mediterranean.

What are the latest developments regarding the dispute between Turkey and Cyprus over exploratory drilling for offshore gas deposits off the coast of Cyprus? Are Turkish Navy ships still in the area?

In late September this year, Noble Energy, a Houston-based company, started drilling the Aphrodite prospect within a maritime area known as Block 12. Noble, the company that has made all the significant gas discoveries in Israel, received the drilling license in Block 12 from the Cypriot government in 2008.

Turkey had threatened to use military force should drilling commence, but refrained from action. Turkey has two major claims regarding Cyprus exploration plans: first, as the protector of the rights of the Turkish minority in Cyprus, it aims to guarantee that the Turkish Cypriots gain a share in the future revenues from any discovery. Second, Turkey doesn't recognize the Cypriot EEZ and claims that parts of it are actually in Turkish waters.