Drilling platform of the Leviathan natural gas field.
Drilling platform of the Leviathan natural gas field. Photo by Albatross
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Eastern Mediterranean countries, including Israel, may be "fooling their people with false promises of an offshore gas bonanza," The Economist writes in its latest issue.

The influential British financial magazine quotes oil analysts as saying that "even Israel, whose development of offshore gas is most advanced, is unlikely … to start exporting large amounts by 2020, as it hopes."

The main obstacle to realizing the potential of the gas fields, the magazine says, is not a shortage of oil and gas but "a lack of regional co-operation."

The estimated potential of the eastern Mediterranean, from the coast of Gaza to southern Turkey, is 122 trillion cubic feet of gas, according to the American Geological Survey, which puts it on a par with the reserves of Iraq.

However, weak governments, disputes between countries, a disputed maritime border between Israel and Lebanon and the civil war in Syria all mitigate against the full and timely exploitation of the gas reserves. One of the examples given is Israel's "[prevention] of the Palestinians from developing Gaza Marine, a field off the coast of Gaza where BG (formerly British Gas) found gas a decade ago."

Israel alone, "is romping along," The Economist writes. "It has verified finds of 35 trillion cubic feet, though the recoverable figure may be lower. Noble, an American company that has so far dominated Israel’s production, says that gas from its Tamar field, which began flowing this year, already supplies 45% of the country’s electricity. But development of the much larger Leviathan field, farther west, is slow. Fearing an outcry over the sale of public assets, Israeli ministers have delayed the timetable."

Turkey, whose energy needs are soaring, might have been an attractive export market for Israel. But, the magazine says, "Israel is loth to strike an export deal with Turkey at a time when that country’s foreign policy has become unpredictable and its prickly prime minister, Recep Tayyip Erdogan, could turn off the tap whenever he feels piqued."

The Palestinians, Jordan and even Egypt, which was Israel's main supplier until 2012, could all be customer's for Israeli gas, but financing is needed – and it may not be forthcoming due to red tape and regional disputes, according to The Economist.

Egypt’s decision to discard a Mubarak-era agreement to supply 40% of Israel’s gas "serves as a warning against doing business amid unresolved conflicts." The Economist quotes former energy minister Yosef Partizky as saying, “without peace with the Palestinians, we can’t sell our gas to Egypt, Jordan, Turkey and—who knows?—maybe even to the Europeans.”

"Without exports, regional prospects are less sunny. Ploughing billions of dollars into platforms, rigs, offshore pipelines or costly liquefied natural gas plants is feasible only if drillers are confident of shipping gas to foreign markets," The Economist concludes.