There is increasing groundwork currently underway in the Eastern Mediterranean, in order to establish an oil industry, in light of recent gas discoveries in its maritime areas, amid sharp political disputes among the countries of the region. Here, we will try to briefly showcase the most important developments in this regard.
Beginning with Egypt, this country has started prospecting its territorial waters lying north of Alexandria and in the Nile Delta since the mid-eighties, launching an exploration campaign in the eastern Mediterranean. The main motive behind this campaign was the early attention given to natural gas, and the economic incentives that were offered to international energy companies to discover gas, especially when equal economic incentives were given for discovering a gas field or an oil field. Before then, no adequate incentives were given for natural gas discoveries, prompting international oil companies operating in Egypt to overlook gas prospects. Egypt has succeeded then, in attracting major international companies to invest in its territorial waters, and indeed, natural gas fields were discovered there, in addition to other finds in Egypt’s Western desert and the Gulf of Suez. Egypt has also developed the potential uses of natural gas, and today, the majority of its power plants are gas-fed, and natural gas in Egypt today finds its way into usage in public transport buses and households. Egyptian natural gas is also exported through pipelines to other Middle Eastern countries and Europe, while liquefied natural gas is also exported to the latter.
In spite of the large quantities of gas that have been discovered, it became clear that the country needs additional quantities of gas in the future, as a result of rising annual consumption levels. From here stems the significance of prospecting for gas in the deep waters of the Mediterranean Sea.
Egyptian gas discoveries encouraged gas exploration in the north in Palestine. British Gas (BG), which operates in Egyptian waters, obtained from the Palestinian National Authority in 1998 a 25 year concession agreement for exploration and production in Palestinian territorial waters.