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East Med Gas Hub – Future Reality or Pipe Dream?


Large amounts of discovered gas and substantial exploration upside provide an opportunity for the Eastern Mediterranean to become a significant exporter. With the region increasingly in the spotlight, due to a number of recent discoveries and acreage offerings, we are taking a closer look at the current E&P picture in the littoral states, and some of the challenges they face.


To date, eight exploration wells have been drilled offshore Cyprus, four of which have been successful. Noble Energy drilled one well in 2011 and one in 2013, discovering and confirming gas in the Miocene Tamar sandstones in the Aphrodite Field (estimated at 4.5 Tcf recoverable). Eni targeted the same play in Block 9 in 2014 and 2015 (Amathousa and Onasagorus), but both wells came up dry. In February 2018, the Italian company attempted to drill a further well on the play in Block 3 however, rig operations with the Saipem 12000 drillship were impeded by Turkish military vessels, which prevented the vessel from reaching the wellsite. A future return to the prospect by Eni has been muted.

Blocking the ship was the latest twist in decades-old feuds and overlapping, contested claims in the eastern Mediterranean. Turkey and its vassal state, the Turkish Republic of Northern Cyprus (TRNC), object to the Republic of Cyprus (RoC) drilling in waters that the RoC claims under international maritime law. The RoC ratified the U.N. Convention on the Law of the Sea (UNCLOS) in 1988 and proclaimed its EEZ, in conformity with UNCLOS, in 2004.

Turkey is the only member state of the U.N. that does not recognize the RoC, and it is not a signatory to the UNCLOS. In addition, Turkey considers that a recent agreement between RoC and Egypt, which ratifies the delimitation of their respective economic waters, is null and void.

Just before this hostile episode in the Cyprus-Turkey relations, Total and Eni had some success in chasing the Zohr play in the RoC EEZ. The Total-operated Onesiphoros West 1 well on Block 11 found non-commercial gas in September 2017, whereas the Eni-operated Calypso 1 NFW on Block 6 was announced as a gas discovery in February 2018. Calypso reportedly contains 6-8 Tcf (assumed to be GIIP); Eni plans an appraisal program.

Subsequently ExxonMobil in partnership with Qatar Petroleum, conducted a two-well back-to-back drilling campaign on Block 10 in late 2018/early 2019. While the first well in the campaign, Delphyne 1, failed to find commercial quantities of hydrocarbons, the second well was successful. Glaucus 1 was announced as a gas discovery, with quantities of natural gas estimated at 5-8 Tcf.

While there had been talk of another offshore bid round (the 4th licensing round), the Cypriot cabinet has decided to go a different route this time around. In early October 2018, it invited companies already licensed to explore offshore Cyprus to submit their expressions of interest (EOI) for Block 7 (Herodotus Basin). The invitation concerned companies with concessions bordering the open block, namely Eni (Blocks 6 and 8), ExxonMobil (Block 10), and Total (Block 11), which were given one month to submit their EOIs. Yiorgos Lakkotrypis, Minister of Energy, Commerce, Industry, and Tourism, stated that the government chose to offer the block in this way instead of another licensing round as, “there are particular geological reasons related to the Calypso discovery.” The Minster’s statement, and the fact the Calypso discovery is located in the SE corner of Block 6, suggest that the Calypso structure extends into neighboring concessions. Total and Eni submitted a joint application for Block 7 and negotiations regarding the award of an E&P sharing contract are underway.

Figure 1. RoC demarcated offshore blocks and exploration wells. Also shown are the RoC’s proclaimed and partly agreed EEZ (light blue line), the TRNC’s proclaimed EEZ and outline of demarcated blocks (red line), the outer limits of the continental shelf as claimed by Turkey (orange line), as well as Turkey’s offshore exploration wells.*

Figure 1. RoC demarcated offshore blocks and exploration wells. Also shown are the RoC’s proclaimed and partly agreed EEZ (light blue line), the TRNC’s proclaimed EEZ and outline of demarcated blocks (red line), the outer limits of the continental shelf as claimed by Turkey (orange line), as well as Turkey’s offshore exploration wells.*


In Turkey, more than a dozen wells were drilled in the Eastern Mediterranean between 1966 and 2014. None of them were successful, apart from some oil and gas shows. While the shows suggest a working petroleum system, it is not a very good track record. However, it must be said that offshore exploration drilling has been limited to near-shore zones in the Gulf of Alexandretta and the Gulf of Mersin, leaving large areas unexplored.

In an effort to extend exploration in the Eastern Mediterranean, the Turkish state oil company (Türkiye Petrolleri Anonim Ortaklığı – TPAO) has conducted extensive seismic acquisition programs over the last few years. In 2013, TPAO bought an 8-streamer 3D seismic vessel from Polarcus (the “Samur,” rechristened the “Barbaros Hayreddin Pasa”). Since then, it has been acquiring masses of data in the Mediterranean and the Black Sea. In the Eastern Med, the vessel has concluded at least seven separate surveys, with another currently ongoing. Surveys have been acquired to the northeast, south, and southwest of Cyprus, parts of which cover disputed areas.

Turkish officials, keen on reducing the country’s energy imports, have stated on various occasions that the country would take steps toward exploring and drilling in the Mediterranean. TPAO acquired its own drillships, the “Deep Sea Metro II” (now renamed “Fatih”) in late 2017, and the “Deep Sea Metro I” (now renamed “Yavuz”) in late 2018. In addition, it signed a two-well contract with Rowan Companies for the “Rowan Norway” ultra-harsh environment jack-up rig.

In November 2018, “Fatih” and “Rowan Norway” commenced drilling activities, with the former spudding the Alanya 1 well, in the Gulf of Antalya, and the latter spudding the Erdemli North 1 well, in Gulf of Mersin. Erdemli North 1 finished drilling in January 2019 and Alanya 1 in mid-April. Results have not been announced so far for either well. The “Rowan Norway” subsequently moved on to the Kuzupinari 1 location at the entrance of the Gulf of Alexandretta.

Some reports suggest that in the future, TPAO will conduct drilling operations in contested waters around Cyprus. For the ultra-deepwater “Fatih” and “Yavuz” drillships with ratings of 3050m, the water depths in the Eastern Med present no problem, allowing them to drill on any of the demarcated Turkish or TRNC offshore blocks.

Turkey and TRNC signed a continental shelf delimitation agreement in September 2001. Turkey’s claim on the island’s EEZ partly overlaps with the RoC’s blocks 1, 4, 5, 6, and 7. Ankara also supports the TRNC’s claims over RoC’s Blocks 1, 2, 3, 8, 9, and 13, where the self-declared TRNC has demarcated Blocks F and G. Should TPAO start drilling in any of these areas, it could lead to a serious geopolitical – or even military – crisis.


After the conclusion in 2017 of the delayed First Offshore Licensing Round, Lebanon is looking ahead to the drilling of the first exploration well. A joint venture between Total (40 percent), Eni (40 percent), and Novatek (20 percent), the only bidding group in the tender, signed E&P Agreements (EPA) for Blocks 4 and 9 in February 2018. Subsequently, Lebanese authorities approved exploration work plans submitted by the Total-led consortium, paving the way for operations; drilling is expected to begin in Q4 2019.

Total’s stated priority is to drill a first well on Block 4, with a second expected to follow on Block 9. With regards to Block 9, the company said that the consortium is fully aware of the Israeli-Lebanese border dispute in the southern part. However, given that the main prospects are located more than 25km from the disputed area, exploration drilling on the acreage will have no interference at all with any fields or prospects located close to the southern border.

Following a once again delayed approval by the Council of Ministers, Nada Boustani Khoury, Minister of Energy, officially launched Lebanon’s Second Offshore Licensing Round in early April 2019. The acreage on offer includes Blocks 1, 2, 5, 8, and 10, which are located in three distinct major geological zones. Block 1 falls within the Lattakia Ridge zone in the NW of the EEZ, Blocks 5 and 8 are located in the deep Levant Basin in the SW, and Blocks 2 and 10 cover parts of the Levant margin in the NE and SE. The blocks have been chosen to offer a number of different play types, as each zone is characterized by different structural and sedimentological features.

As in the first bid round, interested companies will be required to form a consortium composed of three partners or more, with at least one prequalified as operator. Companies will be able to choose their partners and prepare their bids, which have to be submitted by January 31, 2020. Once bids are submitted, the LPA will evaluate them and prepare a recommendation to the Minister of Energy and the cabinet. Negotiations with successful bidders and subsequent awards are currently planned for late March 2020 and early April 2020, respectively.

Figure 2. Lebanon’s exploration and bid blocks.*

Figure 2. Lebanon’s exploration and bid blocks.*


Following several offshore gas discoveries in Israel between 2009 and 2013, current activity is focused on bringing the discovered resources onstream. Noble Energy’s Tamar Field (~10 Tcfg 2P) is the only producing offshore field, with Leviathan (~12.5 Tcfg 2P), also operated by Noble, currently under development. Leviathan’s first phase is more than 80 percent complete, on track to deliver first gas by the end of 2019.

Plans are also in place for the development of the Karish and Tanin fields. Operator Energean’s Field Development Plan (FDP) envisages a two-phase approach, with the Karish Field being developed first. The FDP includes the drilling of three development wells at the Karish Field and the installation of a new FPSO around 90 km from the shore. Development drilling started in March 2019, and first gas is planned for 2021. In a second phase, the Tanin Field development will follow, with the drilling of six wells. These will also be connected to the FPSO.

In terms of exploration, Energean is the only operator currently conducting exploration drilling.

In April 2019, it announced that its Karish North near-field exploration well has made a significant gas discovery in the Tamar B and C sands and the well is being deepened to test the hydrocarbon potential in the D4 horizon. Initial gas-in-place is estimated between 1-1.5 Tcf. Energean has drilling options for six further wells in its contract with Stena Drilling. The company has mapped various prospects and leads on the Karish and Tanin leases, as well as on the five exploration blocks it was awarded the First Offshore Licensing Round.

Further drilling in 2019 may be carried out by EDF subsidiary Edison, which operates the 399 Royee exploration license along the border with Egypt. While the first well on the acreage has been postponed on a number of occasions, Delek Drilling’s recent decision to acquire a 24.99 percent stake in the block may give the endeavor renewed momentum. However, drilling will have to start soon, as the license is only valid up to April 14, 2020. At that point the license will have reached its maximum term of seven years.

Israel’s Second Offshore Bidding Round (OBR2), launched in November 2018, may result in additional exploration activity in the country’s EEZ. The acreage offered for bidding in OBR2 includes 5 Zones (A to E) located south of the large gas fields presently being developed offshore Israel. Zones A, B, C, and D include four blocks each, while Zone E includes only three. Each block measures up to 400 sq km. Most of the area offered for bidding was held by various operators in the past, which acquired seismic data and developed exploration prospects that have not been drilled. The closing date for the submission of bids is June 17, 2019. Following a relatively timid response in the First Offshore Bidding Round, with only two companies submitting bids, Israel hopes for better participation this time. ExxonMobil is rumored to have expressed an interest.

Figure 3. Israel’s exploration and production licenses. The Second Offshore bid round zones consist of 19 blocks.*

Figure 3. Israel’s exploration and production licenses. The Second Offshore bid round zones consist of 19 blocks.*


As the most mature offshore area in the East Mediterranean, and with gas production in the Nile Delta Basin since the 1970s, the focus in recent years has been the ambition of turning the country into the center of an Eastern Mediterranean gas hub. It has not been smooth sailing, however. The country had been in a net gas deficit since 2014 and began importing LNG in 2015. The two LNG export terminals on the Mediterranean coast, Idku and Damietta, had stood idle. In response, authorities earmarked the fast-tracking of significant gas developments, including BP’s Atoll and West Nile Delta (WND) projects, alongside Eni’s Nooros Field.

Then the 30 Tcfg (in place) Zohr discovery came along in September 2015, at just the perfect time. Nooros was brought onstream in September 2015, WND saw first gas in March 2017, with Zohr coming online in December 2017. Atoll soon followed in February 2018, seeing the total addition of c.40 Tcfg of resource available for production. Concurrently LNG exports at Idku terminal have restarted, albeit modestly at c.500 MMcfg/d. A new gas marketing law was passed in 2017, liberalizing the gas distribution market. In 2018, Noble Energy signed a deal with Dolphinus Holdings to supply gas over a 10-year period (via the East Mediterranean Gas Co pipeline from Ashkelon to El Arish), and a proposed gas pipeline between Cyprus and Egypt was ratified by both countries. LNG imports also ceased in September 2018. The recent EGAS 2018 International Bid Round also saw 13 blocks for tender, the largest offering since 2001. Just three were ultimately pre-awarded, to ExxonMobil (one) and Shell/PETRONAS (two). All three blocks are in the prolific inboard and mature part of the Nile Delta.

No bids were successful in the deepwater frontier acreage where Zohr lies, which brings us to the potential thorn in the side of the gas hub debate. Yes, gas from Cyprus (via Aphrodite) may eventually come to Egyptian shores and possibly also Israeli gas (from Leviathan, Tamar and others). However, it is the indigenous gas supply that could potentially become an issue. Since 2016, there have just been five wildcats drilled in the offshore Nile Delta. Four of the five (Baltim South West 1, Nour 1, Swan East 1, Qattameya Shallow 1) were successful, but have added just around c.2 Tcfg to the resource figures. A maximum of 13 NFWs are planned offshore in 2019, although in reality only around half are likely to be drilled. Coupled with a two-year hiatus between Mediterranean licensing rounds (EGAS 2015 and EGAS 2018 bid rounds), and the delay to the launch of a tender offering for the frontier western portion of Egyptian’s Mediterranean waters, there remains a lot of undrilled acreage in the Nile Delta. In reality there is a need for a ramping up of exploration offshore Egypt in the short term, and ideally the finding of another multi-TCF discovery, in order to both sustain the gas-hungry nation, as well as continue to contribute to the gas hub picture into the future.

Figure 4. Egypt’s exploration and production licenses in the Eastern Mediterranean.*

Figure 4. Egypt’s exploration and production licenses in the Eastern Mediterranean.*


The gas in the Eastern Mediterranean provides risks and opportunities alike for the littoral states. Further successful exploration campaigns and export solutions could significantly help reduce the energy dependence for some of the countries and provide additional revenue to the public coffers. However, even if further significant resources are discovered, it is not guaranteed these will be quickly developed. As shown in the case of Aphrodite and Leviathan, a number of factors can result in long delays.

In addition, complex geopolitics always present a challenge in the Eastern Mediterranean. Should resources be discovered in disputed waters, it could potentially cause further friction in the area, or worse. On the other hand, the common desire to profit from the gas riches in the region might lead to more collaboration. A case in point is the establishment of the East Med Gas Forum, which includes seven members – Egypt, Israel, Greece, Cyprus, Jordan, Italy, and the Palestinian Authority. However, the absence of Turkey and Lebanon highlights the difficult relationships

As mentioned above Egypt’s hopes of becoming a gas hub in its own right in the Eastern Mediterranean are dependent on the country’s indigenous demand and future exploration success. However, taking the significant discovered resources in Israel and Cyprus into account, the idea of Egypt becoming a gas hub is not implausible. Another much discussed possible export route for Israeli and Cypriot gas is the EastMed pipeline from Israel to Italy, via Cyprus and Greece. The current design envisages a 1,300km offshore pipeline and a 600km onshore pipeline, capable of transporting 353 Bcfg per year. The project has been deemed technically feasible and financially viable by IGI Poseidon (a 50-50 joint venture between Edison and DEPA). However, questions remain on whether the gas transported through the pipeline could compete with gas from other sources, like Russia and U.S. (LNG).

* The maps are not an authority on international boundaries.

[email protected] – Regional Manager Middle East
[email protected] – Regional Manager North Africa

East Med Gas Hub – future reality or pipe dream?

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