In recent years, the Eastern Mediterranean basin came to the fore with the discovery of wide hydrocarbon fields, and now it has once again become a hot topic with the discovery of an important natural gas field in Egypt in the last few weeks.
Developments indicate that the Noor gas field in the Egyptian waters has the largest natural gas reserves of the Eastern Mediterranean.
In 2015, the giant offshore Zohr gas field, which has a capacity of 850 billion cubic meters of natural gas, was discovered in Egyptian waters. Naturally, the presence of a resource-rich potential of this basin has made the region ever more so attractive for international energy companies with each passing day.
History of energy in Egypt
Egypt has a crowded population, and energy demand follows a trend parallel to population growth. In other words, the increase of the population from day to day increases the energy consumption in the country and it requires sufficient resources that will meet this consumption.
The fact that Egypt is located in a strategical region in terms of natural resources due to its geographical location has played an important role in both energy trade and energy transfer. However, it can be said that the Arab Spring, which began in the region in 2010, and the succeeding military coup in the country have, to a great extent, been effective in Egypt losing its superiority in the region in terms of energy.
Moreover, the country has been unable to export oil and natural gas during this period. Egypt’s oil production which was 61.4 billion cubic meters in 2011 decreased to 41.8 billion cubic meters in 2016. In reality, this situation proves that there are not enough resources to meet the growing energy demand in the country. As a matter of fact, Egypt has also resorted to importing energy in order to meet the energy demand during that period.
Therefore, it is quite plausible to refer to the crisis and problems created by the political turmoil in the country as the most important factor in Egypt’s problems in recent years, particularly in energy supply.
One of the most important needs of today's Egypt is to generate enough energy that will meet its domestic consumption, and then to dominate energy trade in the region again. For this purpose, new hydrocarbon reserves and new energy fields are needed.
In this context, the Eastern Mediterranean is undoubtedly the ideal platform for Egypt to meet its energy needs. As it can be deduced from the endeavors of the international energy companies in Egyptian waters, Egypt is quite insistent to be a part of the energy equation in the region.
Egypt in the shadow of developments in the Eastern Mediterranean
The discovery of natural gas fields in the Eastern Mediterranean brought the agreements and alliances that would take place between the countries of the region to the agenda, and also prompted countries with reserves to search for markets.
Regarding the Eastern Mediterranean Natural Gas Pipeline, which is always on the front burner compared to the other initiatives to form an alliance, and aims to transfer the region's natural gas to the European market, there are still no concrete developments, however the countries of the region, and Greece and Italy continue to make contact every now and then.
In the Eastern Mediterranean, an agreement signed between Egypt and the companies operating on Israeli gas fields was brought forward recently. This agreement with Israel is in fact a sign of cooperation between Eastern Mediterranean countries, including Egypt which is still in search of export countries to meet its energy needs.
However, it is an undeniable fact that the Eastern Mediterranean's largest natural gas fields were found in the Egyptian waters in the last few weeks, which gave rise to the decline in the shares of the companies that run natural gas operations on Israeli fields. In other words, the freshly-signed agreement might lead to various results due to the influence of recent developments.
Time will reveal how the course of strategical balance for energy in East Mediterranean will be. Will Egypt continue to use the natural gas potential in the Eastern Mediterranean in the most reasonable way and obtain an advantage in the energy market, or will it continue its efforts to supply energy in the shadow of the present problems?