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Israel and Cyprus: In search of solutions to natural gas challenges in the Eastern Mediterranean

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The Eastern Mediterranean’s gas resources can promote cooperation, resolve conflicts and deliver financial benefits, resulting in contributions to the economic development of Israel and Cyprus.

Gas discoveries in Israel have the potential to transform the country’s energy outlook but despite opportunities, the exploration and development of gas fields with proven reserves have faced a stalemate due to regulatory issues and political concerns.

In an effort to overcome obstacles and reignite a number of preliminary agreements to export gas, the Israeli government approved a revised framework for gas regulation that favors the development of Leviathan and the expansion of Tamar fields seeking to establish a stable business climate and paving the way for Israeli gas to be exported. The main outlines of the gas regulatory framework center on the mandatory sale by Noble, Avner Oil & Gas and Delek of all their rights in the Israeli Tanin and Karish fields; and, a stability clause which foresees that the Israeli government guarantees regulatory stability for ten years. Additionally, as prescribed, the development plan of Leviathan field whose 9 billion cubic meters (bcm) annual gas surplus is destined for export will be carried out in two stages: The first lies in four development wells and an annual capacity production of 12 bcm. The second lies in four additional wells and an increase of the capacity production by another 9 bcm. Leviathan’s exports are destined to satisfy Israeli domestic demand, Jordanian and Egyptian power and industrial needs, as well as Turkish ambitions of becoming a hub for Eastern Mediterranean energy.

The supply of natural gas from the Leviathan and Tamar fields to Egypt which suffers from domestic gas shortages due to export obligations and a growing population is considered geopolitically important. Israel’s energy policy vis-à-vis Egypt has a dual dimension focusing not only on the sale of gas from Israeli fields, but also on the use of Egypt’s LNG facilities as export terminals to reach markets like Europe and Asia.

Partners of Israel’s Tamar field signed a non-binding letter of intent to export up to 2.5 trillion cubic feet of gas over 15 years via the Damietta LNG plant in Egypt operated by Union Fenosa Gas, a joint venture between Spain’s Gas Natural and Italy’s ENI. Similarly, Leviathan partners reached a preliminary agreement with British Gas (BG) to negotiate a deal to export gas to BG’s liquefied natural gas plant in Idku (northern Egypt) via a new undersea pipeline. The first formal approval by the Israeli energy ministry for the export of gas from the Tamar field to Egypt’s Dolphinus Holdings has been granted in late 2015. Although it still hinges on bureaucratic approvals, the decision paves the way for enhanced bilateral cooperation in the gas sector.  

Another prime Israeli export option is linked to Jordan whose 90% of energy requirements depends on imports. The growing number of refugees from Iraq and Syria further increase energy demand, which burdens Jordan’s public finances. At a time of regional instability, reliable gas imports could strengthen Jordan’s energy security. It is in this context that in mid-September 2016 Leviathan’s main partner Noble signed an agreemet with Jordan’s National Power Electric, which will act as buyer of the gas, to supply 1.6 trillion cubic feet (tcf) over a fifteen-year period.  

Regarding export routes, a combination of options is on the table prioritizing the need for the construction of an 8-kilometer pipeline from Israel to Jordan that would transfer natural gas from Leviathan at a border location to be specified. A related project focuses on the construction of a 25-kilometer pipeline that would connect northern Israel to northern Jordan, facilitating the supply of natural gas to major Jordanian manufacturing plants. Infrastructure partnerships between Israel and Jordan are deemed to provide real incentives to normalize relations, given that the supply of cheap and reliable energy can bolster Amman’s economy and Leviathan partners’ export earnings can increase.

The option of a pipeline from Israel’s gas fields to Turkey has given rise to a divergence of views. On the one hand, advocates to the pipeline option argue that the construction of the 480-kilometer pipeline that would connect Leviathan field to the Turkish coast is not only financially viable but also guarantees Israeli access to the Turkish domestic market which consumes 40 bcm annually and to transit routes across Turkey into Europe. The recent reconciliation between Israel and Turkey is estimated that it can cement a lucrative gas export agreement to be supported by bankable contracts, thus supporting the level of Leviathan’s scheduled development plan. All this, on the provision that the Cyprus conflict is resolved given that Cyprus could effectually veto the crossing of the pipeline through its Exclusive Economic Zone under its rights as a signatory of the United Nations Convention on the Law of the Sea (UNCLOS).

On the other hand, opponents to the pipeline option support that post-coup Turkey is expected to consolidate regional power through the cementing of relations with Russia and Iran, while the Turkish presidency is deemed to become more autocratic. This may undermine prospects of the undersea pipeline option since Israel appears unwilling to permit its gas to be held hostage. In general, changes in regional politics such as Turkey’s orientation could endanger the sustainability of Israeli gas exports, as has happened with Egyptian exports to Israel. Reservations are also expressed regarding financial security in any future framework energy agreement between Israel and Turkey, with suggestions on that financial security could be provided by a third party such as the U.S. Overseas Private Investment Corporation, the U.S. Export-Import Bank, or the German Euler Hermes company.

In search of progress, it is evident that Israel looks into multiple gas export options so that its gas is not tied to a single market where changing bilateral relations or geopolitical conditions can affect the sustainability of exports and thus impact negatively its energy wealth.

Coming to neighbouring Cyprus, the island is assessed to gain significant economic benefits from its commercially viable levels of hydrocarbon resources. These benefits come in the form of job creation, foreign direct investment, royalties, and taxes paid to the state treasury by energy suppliers. The island’s recent third licensing round for the blocks 6, 8 and 10 within its Exclusive Economic Zone has attracted major international energy players such as ENI, Total, Exxon Mobil and Qatar Petroleum on the basis of closeness to the Egyptian Zohr and the Israeli Leviathan gas fields. The plan would be to connect gas discoveries in Cyprus with Egypt’s by pipeline and re-export reserves as liquefied natural gas by utilizing the Egyptian Idku and Damietta LNG facilities. The development of Cypriot gas fields necessitates synergies among local and international players, users, and producers eager to export gas to a broader market.

The criteria for the evaluation of the third licensing round’s applications are related to the technical and financial ability of the energy companies; the financial proposal of the applicant to obtain a license; the applicant’s commitment to training of personnel; political considerations in having major international energy players involved in the Cypriot blocks; and, any irregularities and lack of responsibility that the applicant may have demonstrated under a previous license in Cyprus or in any other country.

The declaration of commerciality of the Cypriot Aphrodite field in 2015 by Noble, Delek and Avner Oil & Gas partners has been considered a significant step for the transition from the stage of exploration to that of exploitation, and a step towards the monetization of the island’s indigenous gas reserves both for domestic use and exports. Nevertheless, Cyprus faces multiple challenges to monetizing natural gas resources that are associated with regional export options, such as the pipeline project that would connect Israel’s gas fields to the Turkish coast. There is growing consent that the natural gas discoveries in Cyprus could prove a catalyst for a breakthrough in the strategic impasse over the island, which is still divided between Greek-Cypriot and Turkish-Cypriot communities. There are estimates according to which the breakthrough can also pave the way for the export of gas from Cyprus to Turkey given that distances from the Cypriot to the Turkish coasts are short and the length of an undersea pipeline would be approximately 100 km.

No doubt that Cyprus’s natural gas discoveries present a strategic game changer that poses all kinds of risks and opportunities for the island’s economic recovery. Looking ahead, what needs to be examined is the creation of a Cypriot sovereign wealth fund, based on the Norwegian model, to recycle revenues, and the establishment of a regional sponsor-supported non-governmental organization or council that would include energy companies, energy industry service providers, energy industry associations, and other related stakeholders in the region. Once established, the council could seek government participation from the littoral states of the Eastern Mediterranean. It could then become a point of reference and also an avenue of communication between governments and industry, as well as a clearinghouse for ideas and plans for mutually beneficial energy development in the region. If successful on regional energy, such an organization could eventually focus on a broader scope of regional cooperation.

Unquestionably, Israel and Cyprus present two countries that can serve as pillars of energy cooperation and development in the Eastern Mediterranean. Working from this collective strength, they can pursue bilateral and regional policies for the prosperity of their peoples and the coming generations.

Antonia Dimou is Head of the Middle East Unit at the Institute for Security and Defense Analyses, Greece; and, an Associate at the Center for Middle East Development, University of California, Los Angeles

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Middle East

Escalation of violence in Jerusalem

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Image source: protothema.gr

According to some analysts, a clause of the Emirates-Bahrain and Israel agreements opens the door to the prayers of Jews in the sacred place

On the afternoon of May 10, the Al-Qassem brigade in Gaza gave an ultimatum to the Israeli occupiers to leave the Al-Aqsa complex and release the prisoners. An hour later, missiles were fired from Gaza towards Jerusalem. An anti-tank missile was fired at an Israeli army jeep near the Gaza border. Subsequently, other volleys of missiles were fired by other resistance groups at targets near Gaza.

The Israeli military canceled the start of a large-scale maneuver it had planned to carry out over the next 30 days. That move was seen as a preparation for an all-out attack on Hezbollah in Lebanon. Yesterday Hezbollah announced a general mobilization of its forces to deter a potential surprise attack. Israeli troops are now on alert for potential escalation within Israel and Gaza. After four elections, Israel still does not have a new government. Prime Minister Netanyahu is on trial for corruption. A broader war that can turn into a victory could help him avoid judgment and get votes in the next election. According to Jewish tradition, the ancient Jewish temple was located exactly where the Al-Aqsa mosque is now located. The Zionist movement aspires to rebuild the third temple, but in order to do so they must first remove the mosque.

According to an investigation by Terrestrial Jerusalem (TJ) an Israeli non-governmental organization, the claims contained in the normalization agreements between the United Arab Emirates (UAE), Bahrain and Israel (known as the “Abraham Accords”) mark a “radical change in the status quo and have far-reaching and potentially explosive consequences ”. The violence that is taking place these days depends on those agreements.

According to the status quo established in 1967, only Muslims are allowed to pray on al-Haram al-Sharif [the Noble Shrine in Arabic, i.e. the Temple Mount], Temple Mount, according to the Jews, also known as the Al mosque complex Al-Aqsa. Non-Muslims can visit the site, but not pray. Benjamin Netanyahu, the Israeli prime minister, confirmed this status quo in a formal statement in 2015. However, a clause included in the recent agreements between Israel and the Gulf states indicates that this may no longer be the case. According to the joint statement between the US, Israel and the UAE issued on August 13, 2020, by US President Donald Trump: “As set forth in the Vision for Peace, all Muslims who come in peace may visit and pray at the Al Aqsa Mosque, and Jerusalem’s other holy sites should remain open for peaceful worshippers of all faiths”.

But Israel defines Al-Aqsa as a ‘mosque structure’, as in the statement, clarifies TJ’s report: “…according to Israel (and apparently to the United States), anything on the Mount that is not the structure of the mosque is defined as ‘one of Jerusalem’s other holy sites’, and open to prayer by all–including Jews”, says the statement.

Consequently, this choice of terminology is neither random nor a misstep, and cannot seen as anything but an intentional, albeit surreptitious attempt to leave the door wide open to Jewish prayer on the Temple Mount, thereby radically changing the status quo”.

The same statement was repeated in the agreement with Bahrain.Palestinians have long been concerned about possible attempts to partition the holy mosque, as happened with the Ibrahimi mosque [Tomb of the Patriarchs for Jews] in Hebron.

A Temple Movement has developed over the years, consisting largely of “far-right nationalist religious Jews seeking to change the status quo” reports TJ. Some ask for prayer for the Jews inside the sacred complex, while others aim to build the Third Temple on the ruins of the Dome of the Rock which, according to Messianic prophecies, would announce the coming of the Messiah.

Over the years, the Israeli NGO Ir Amim has published numerous reports of this once marginal group, but which is now part of a dominant political and religious trend and enjoys close ties with the Israeli authorities.

These activists believe that allowing Jews to pray as a whole and divide the sacred site between Muslims and Jews is a step towards sovereignty, to one day achieve their ultimate goal, the construction of the temple.

A more brazen statement was included in the “deal of the century”, the plan for the Middle East unveiled in late January 2020 by Trump and Netanyahu in the White House.

Jared Kushner, Trump’s senior adviser and son-in-law, was the most prominent person working on the proposal, while Ron Dermer, Israel’s Ambassador to the US, was credited with formulating the agreement.

The plan stipulates that “the status quo of the Temple Mount/Haram al-Sharif should remain unaffected”, but the next sentence also says that “people of all faiths can pray on the Temple Mount/Haram al-Sharif”.

The clause caused controversy and prompted David Friedman, US Ambassador to Israel, to retrace his steps during his press meeting on January 28, 2020. “There is nothing in the plan that would impose any alteration of the status quo that is not subject to agreement of all the parties”, he said.

Friedman’s quick retraction of the sentence contained in Trump’s plan attests that Dermer probably inserted it and that Kushner did not understand it. The fact that it was Friedman who retracted and not the White House also means that the language of Trump’s plan is still official and decisive when it comes down to it.

The normalization agreements come after the Israeli authorities installed loudspeakers on the east and west sides of the Al-Aqsa complex without the permission of the Waqf (Islamic institution).

The sacred complex is administered by the Islamic Waqf based in Jordan. According to the status quo, Israel is only responsible for security outside the gates. In his report, TJ notes that the agreement does not mention the Waqf and its autonomous role.

Meanwhile, Israel has killed 20 Palestinians in Gaza and injured hundreds in Jerusalem as tensions in Al-Aqsa flare up.

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Attack On Jerusalem – Where Is The International System?

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Since mid-20th century the conflict has been referred to as the ‘most intractable conflict’ in the world with the ongoing Israeli occupation. For more than about 54 years the international system has failed to settle this dispute and the two countries did not reach a peace agreement. In past, the Israeli Government had restricted the Palestinians and have been involved in many illicit activities violating human rights. Palestinians remain subject to Israeli military occupation and the recent attack on Masjid Al-Aqsa is strong evidence of this fact. Tensions in Jerusalem and West Bank accelerated during the Holy month of Ramadan including evictions of Sheikh Jarrah in East Jerusalem.  

The third holiest site for the Muslim community, Temple Mount also known as Masjid Al-Aqsa, located in the city of Jerusalem has been attacked by the Israel forces on the Holy night of Laylat al-Qadar and again after two days in the morning. The incident has been brought forward by the media in several ways calling it an attack conflict or clash. The Israeli police forces stormed hundreds of Palestinians during prayer time. The unrest resulted as cops entered the compound, creating an atmosphere of fear echoes of prayer together with the noise of stun grenades and fires. More than 200 Muslims offering prayer have been targeted and hit by rubber bullets and a score of attackers themselves were wounded. When the prayer zone was turned into a battlefield, the loudspeakers of the mosque called for peace and calm.

“Police must immediately stop firing stun grenades at worshippers, and the youth must calm down and be quiet!”

Violation of Human Rights pushed Palestine to demand a session of the United Nations Security Council (UNSC). President of Palestine, Mahmoud Abbas “held (Israel) responsible for the dangerous developments and sinful attacks taking place in the holy city.” Israel’s obligations under international humanitarian law have been violated many times and now the international community is no more silent about it. Whatever is happening in East Jerusalem its occupation,  has no legitimate claims. UNSC has asked Israel to withdraw many times and has passed a number of resolutions demanding this. The United Nations has asked Israel to cancel any forced evictions in Israeli-annexed east Jerusalem, warning that its activities could add up to “war crimes“. Moreover, Israel has no legal claim on the city but is still carrying out an ethnic cleansing campaign in East Jerusalem. The most recent example includes the eviction of Palestinian families from Sheikh Jarrah.

Once again many statements have been given by the international community condemning the actions not finding the solution to end this. Muslim countries united joining hands in hands with their Muslim brothers and sisters. Iran, Saudi Arabia, Pakistan, UAE gave their stance against Israeli actions and made it crystal clear that such actions cannot be tolerated at any cost. Moreover, European Union (EU) and United States (US) also expressed their concerns about violence.

The atrocities of Israeli police forces have now met the definitions of apartheid and persecution as stated by the report of Human Rights Watch (HRW); “A Threshold Crossed: Israeli Authorities and the Crimes of Apartheid and Persecution” released in April. This includes the crime against humanity in the region of Ghaza Strip, West Bank, and Israel. This well-researched report however has very little impact on the bilateral relations between Palestine and Israel. It states that a system of systematic oppression and racial domination with a claim over land and demographics is what Israel intends to have. Israel’s foreign minister claimed it to be an ‘anti-Israel agenda’ being both false and preposterous.

Blockade of Ghaza strip and freedom movement limitations further poses a serious threat to the population during the COVID-19 pandemic, making it more vulnerable. The firing by Islamic Jihad and its counter-attack, airstrikes against Ghaza and Hisbullah, demolitions, forcible transfers, violation of international law, discrimination, and use of force are all factors that aided the current situation between the two countries. Lack of access to health care units, feeling of fear and terror everywhere, insecure atmosphere all poses a serious question; “Where does the international system stand?”

With each escalation, all that comes forward is another resolution by UNSC for Israel to withdraw, statements from various states condemning the situation, and wait for another incident. While considering the Israel-Palestine conflict one might comprehend this issue as a failure of the international system to maintain peace. Many predictions and solutions have been brought forward by analysts and researchers each with some evidence supporting their stance. However thinking about a solution and solving the problem in actual seem to be two opposite poles of a magnet, but definitely not attracting one another.

For negotiations and peace agreements, the two states need to share a common vision which seems to be very unlikely to happen. The Israeli occupation of Palestinian territories seems to end only by establishing a relationship between the two that involves a feeling of trust and security for other states. For this, the political arrangement should be right with adequate involvement of International Organizations such as the UN. Boarder modifications and acceptance for two-state solution tend to develop the ideal conditions for this relationship.

Thus reality points in a different direction and this raises a question to the international system. Where is the international law securing the lives and freedom of people in East Jerusalem? Where is the UN Charter providing education, health, and other facilities to the people of Gaza? Where are the efforts of great powers such US, China, Russia to safeguard and secure the local citizens and maintenance of peace? Where are the rights of citizens during occupation under Geneva Convention? Where is the role of International Organizations while considering this dispute? And last but not least where the answer to all these questions is.

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Saudi Arabia and Iran cold war

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After almost seven decades, the cold war has reached the middle east, turning into a religious war of words and diplomacy. As Winston Churchill says that “diplomacy is an art of telling someone to go to hell in such a way that they ask for the direction”. So, both the regional powers are trying to pursue a policy of subduing the adversary in a diplomatic manner. The root of the conflict lies in the 1979, Iranian revolution, which saw the toppling of the pro-western monarch shah Muhammad Reza Pahlavi and replaced by the so-called supreme leader Ayatollah Khamenei. From a Yemini missile attack to the assassination of the supreme commander QassimSoleimani, the political, ideological and religious differences between Iran and Saudi Arabia are taking the path of confrontation. The perennial rivalry between the two dominant Shiite and Sunni power house ins an ideological and religious one rather than being geo strategic or geo political. Back to the time when Saudi Arabia supported Saddam Hussain against the united states of Americathe decline of Saddam and his authoritarian regime was made inevitable and with this, Iran and Saudi Arabia rosed as the powerful, strategic and dominant political forces in the middle east.it was from here that the quest for supremacy to be the prepotent and commanding political powercommenced. The tensions escalated or in other words almost tended to turn into scuffles when in 2016, the Iranians stormed the Saudi embassy as a demonstration of the killing of a Shia cleric. The diplomatic ties were broken and chaos and uncertainty prevailed.

This cold war also resembles the original one., because it is also fueled by a blend of ideological conviction and brute power politics but at the same time unlike the original cold war, the middle eastern cold war is multi-dimensional and is more likely to escalate .it is more volatile and thus more prone to transformation. This followed by several incidents with each trying to isolate the other in international relations. The Saudis and Iranians have been waging proxy wars for regional dominance for decades. Yemen and Syria are the two battlegrounds, fueling the Iran-Saudi tensions. Iran has been accused of providing military assistance to the rebel Houthis, which targets the Saudi territory. It is also accused of attacking the world naval ships in the strait of Hormoz, something Iran strongly denies.  This rivalry has dragged the region into chaos and ignited Shia-Sunni conflict across the middle east. The violence in the middle east due to this perennial hostility has also dire consequences for the economy of the war-torn nations. In the midst of the global pandemic, when all the economic activities are at halt, the tensions between the two arch rivals will prove hazardous and will yield catastrophic results. The blockade of the shipping and navigation in the Gulf, attacks on international ships, and the rising concerns of the western powers regarding this issue has left Iran as an isolated country with only Russia supporting her.

A direct military conflict between Saudi Arabia and Iran will have dire consequences for the neighboringcountries. A direct military confrontation might not be a planned one, but it will be fueled due to the intervention of the other key partners, who seek to sought and serve their personal and national intrigues. Most importantly middle east cannot afford a conflict as it is a commercial hub for the world. The recent skirmishes in Iraq sparked fears of wider war when Iraq retaliated for killings of QassimSoleimani. If the US president had not extended an olive branch, the situation might have worsened. The OIC, which is a coalition of 57 Muslim countries has also failed in bringing measures to deescalate the growing tensions. The OIC, where the Saudi Arabia enjoys an authoritarian style of dominance has always tried to empower her own ideology while rising the catch cry of being a sacred country to all the Muslims. Taking in account, the high tensions and ideological and the quest for religious dominance, the international communities such as UN and neighboring countries should play a positiveand vital role in deescalating these tensions. Bilateral trade, communications between the two adversaries with a regional power playing the role of mediator and extending an olive branch to each other will yield better results and will prove fruitful in mitigating the conflict if not totally subverting it.

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