DELPHI, Greece – A major offshore natural gas discovery in the Eastern Mediterranean near Cyprus at the Glaucus-1 well by US energy giant ExxonMobil said on February 28 will increase the region’s geopolitical importance and reduce Europe’s energy dependence, leading experts told New Europe at the Delphi Economic Forum.

“The East Med’s importance is associated with the EU and US’s strategic decision to reduce European dependence on Russian natural gas. Therefore, the region is perceived as a supplementary alternative that, together with other sources, can contribute to this objective, Constantinos Filis, director of research at Institute of International Relations, told New Europe.

A participant at the Delphi Economic Forum, Filis noted that the interesting development is Israeli Prime Minister Benjamin Netanyahu’s strong willingness to support the EastMed natural pipeline that plans to transport gas from Israeli and Cypriot fields through Greece and onto Italy, “and in the coming weeks we will find out how this is going to evolve.”

US Ambassador to Greece Geoffrey Pyatt told a session at the Delphi Economic Forum on March 1 that US State Secretary Mike Pompeo wants to participate in the summit between Greece, Cyprus, Israel and the United States but it’s a matter of logistics where and when it will take place. Pyatt reiterated Washington’s support for the EastMed pipeline but noted that the market will decide whether this gas project would be constructed. He stressed that “obviously yesterday’s announcement (February 28) of ExxonMobil will positively affect the market.”

Meanwhile, John Roberts, Energy Security Specialist at Methinks, told New Europe in Delphi on March 1 that the EastMed pipeline project faces a combination of technical and commercial issues. “It’s not the political problem of the pipeline that concerns me it’s whether or not it’s commercially practical,” he said.

In terms of Exxon’s discovery at Cyprus’ Glaucus-1, Roberts said, “In the long run it’s extremely important and obviously helpful from the point of view of overall Mediterranean and European energy security.

He noted, however, that in the short run it poses two kinds of immediate problems. “The first one is a simple straight commercial one, which is namely that the only export route that is as it were immediately practicable is by taking it to Egypt and have it liquefied there and exported from the gasification plants in Idku and Damietta,” Roberts said.

Roberts pointed out that as a result of the massive Egyptian Zohr field and as a result of other Egyptian discoveries, it’s possible for those plants may already be rapidly filling up to capacity in the next couple of years so therefore one has to think of a completely new approach for the new ExxonMobil and potential Italian energy major ENI discoveries.

That raises a question does Cyprus revert to the plan for a liquefied natural gas (LNG) liquefaction plant at Vasilikos on Cyprus. “And I would have thought that has to be a fair prospect that in the long run that’s a reasonable solution but it does cost a lot of money upfront and that really does require very substantial proof of reserves but I would guess you wouldn’t get any real movement on that for about a year or so,” Roberts said.

“The other question, of course, is a political one which is in international law as I understand it the government of Cyprus has rights to issue offshore concessions to whoever it wants,” he said, adding that the concessions that are likely to yield results are firmly in waters that lay offshore physical territory controlled by the government of Cyprus.

“Whether that’s sufficient to prevent intervention of the physical kind by Turkish military and or commercial pressures that I don’t know. I suspect it is but one cannot be entirely sure. What may be more optimistic is that gas could play a significant role in building trust between the indigenous Greek and Turkish communities in Cyprus,” Roberts said. “Gas development has to be seen from the very beginning to benefitting everybody on the island,” he said.

Filis said there is a 60% probability that Turkey will send one of its drill ships into Cyprus’s exclusive economic zone (EEZ). Particularly in fields 1, 4, 5, and 7, which it claims lie partly within its continental shelf.

“Since Ankara cannot discuss this substantially with regional states, including Israel and Egypt, and does not recognise Cyprus, it has no other way/means to try and intervene in energy developments other than through threats and projection of power,” Filis said, explaining that besides, its image will be further damaged if its threats prove empty.

“It (Turkey) has to take some kind of provocative action in order to test the waters and warn all involved parties, including energy companies, that it is determined to protect its interests. I wonder whether the US and the EU, but particularly the former, will try to prevent such actions on the part of Turkey or will tolerate Ankara’s installing its drillship — provided it does not hamper energy companies’ drillings,” Filis said.

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