On Sunday, Ente Nazionale Idrocarburi S.p.A. (Eni), an Italian multinational oil and gas company, announced its discovery of a “super giant” natural gas field in the Mediterranean Sea 120 miles off the coast of Egypt, covering an area of approximately 38 square miles, roughly the size of South Bend, Indiana. Easily the largest natural gas discovery ever made in the Mediterranean, it could also be one of the largest gas discoveries in the world, pending new seismic data. Holding an estimated 30 trillion cubic feet (the energy equivalent of 5.5 billion barrels of oil, the amount of oil the United States consumes in a year) at a depth of around 9/10th of a mile below the seafloor, the Zohr field is 7-8 trillion cubic feet larger than the previous largest find in the Med, Israel’s Leviathan field. Related: Financial Sector To Cut Credit Supply Lines For Oil And Gas Industry The discovery of the Zohr field rockets Egypt from a country with significant challenges in meeting its ever-growing energy requirements to a regional player in the energy trading market. Egypt has sold very little natural gas in the recent past due to political instability and sabotage to a major pipeline to Jordan. The Arab world’s largest population has been dependent on imports from neighboring countries in recent years. However, Eni projects that this find will be a “major contribution” in meeting Egypt’s demand for “decades,” and industry experts agree that this find will “cover a lot of Egypt’s energy gap.” Zohr alone would meet Egypt’s natural gas requirements for almost two decades. But not everyone is as happy as Egypt over the new find. The Leviathan field, now suddenly second best in the Med, was preparing to sell to regional customers, including Egypt. The Zohr find alone represents almost as much natural gas as Israel has found in all of its Mediterranean waters. A partnership between the United States’ Noble Energy and Israel’s Delek Group to work the play passed government muster mere weeks ago, with Noble and Delek committing to invest US$1.5 billion in bringing the gas to market, with the assumption that three quarters of it would be sold on the international market. This deal was to be Israel’s opening gambit in the petroleum game that her neighbors had been in for generations, with exports slated to begin early in the coming decade. Related: How Brazil Can Rebound From The Massive Corruption Scandal Now many of these plans are in question. With Egypt a competitor instead of a customer, Jordan may still buy a small share of the Leviathan product, but once-friendly Turkey, now embroiled in a diplomatic disaster with Israel, is not likely to be in the market for Leviathan hydrocarbons, either. Domestically, Leviathan faces competition by Tamar, itself the once-reigning biggest natural gas play on Earth. Although the partnership working Tamar (Noble, Delek, Isramco, and oilfield services company Dor Gas Exploration) agreed to export one quarter of its product to a currently idle plant in Egypt for export to southern Europe, the odds of the plant, in which Eni holds a 40 percent stake, accepting Tamar natural gas are currently nil. Plus, Tamar is 31 miles closer to shore than Leviathan, and Noble already has hard-won plans in place with the government to build a pipeline onshore for processing into the domestic natural gas infrastructure. However, building a line for sale to Egypt has been stalled by the Israeli government, who, according to the Israeli Energy Minister, has been “sleepwalking” while the rest of the world continued petroleum development around them. None of these developments have done much to advance the cause of Israel’s energy stocks, either – the Israeli oil and gas index took a swan dive to the tune of 13 percent in the hours after the announcement of the discovery at Zohr. Related: West Texas Fracker Uses Toilet Water To Cut Cost Eni’s new find poses problems for Cyprus as well. Discovered in 2011, the Aphrodite gas field is 21 miles west of Leviathan. The field is located in contentious waters, but the modest 3 to 9 tcf field represented modest hope in digging itself out of the late Eurozone financial crisis. Now the Cypriot government finds itself in search of a viable Plan B. Two possibilities for salvation exist – export to Europe via Turkey, or a partnership with Israel to refine both Aphrodite’s and Leviathan’s product domestically, then on to sale in Europe directly. However, those plans are strictly theoretical – no announcement has been made at press time regarding either. The Cypriot government has done its best to put on a brave face regarding Zohr. Energy minister Yiorgos Lakkotrypis said that this discovery means even more reserves await discovery in Cypriot waters. Government Spokesman Nikos Christodoulides claimed on Wednesday that the find “enhances” Cyprus’ influence on the energy playground, and promises that the naysayers will be proven wrong “within the next month.” And Cyprus President Nicos Anastasiades claimed that the discovery next to their own block “enhances the geostrategic and geopolitical role” of their country in Europe. The petroleum potential for the eastern Mediterranean seabed has only been seriously exploited since 1967, and the currently known reserves are certainly just the tip of the iceberg. However, the find announced Sunday has seesawed the balance of natural gas resources. The Nile has yet again provided for her people. By Scott Belinksi for Oilprice.com More Top Reads From Oilprice.com:
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