Needless to say, if Yves is here, the geology of the Eastern Mediterranean Gas Field is above my salary scale. More specifically, it would be helpful to know how many of these gas fields are claimed by multiple countries; I remember that during the Greek rescue negotiations in 2015, Greece and Turkey were competing. The ongoing development agreements involve Turkey, Greece and Israel. This seems strange, or more accurately, prone to conflict, because Lebanon and Syria are located between Israel and Turkey on the Mediterranean Sea. Recall that the first Gulf was triggered by the fact that Kuwait extracted more oil from the oil fields shared with Iraq than Iraq thought fit, and Saddam obtained the US permission to invade (this is not a crazy guess; according to it) Reported by Economists).
Author: Dr. Cyril Widdershoven, who has held multiple advisory positions in international think tanks in the Middle East and the energy sectors of the Netherlands, the United Kingdom and the United States, and has held multiple senior publishing positions in leading energy publications such as Afroil, Middle East, Oil and Gas, and In Cairo, the North African Oil and Gas Magazine, he continues to oversee the Mediterranean Energy Political Risk Advisory.Originally published on Oil price
- The apparent easing between the UAE and Turkey may be one of the most important geopolitical developments in the region in decades
- If Mohammed bin Zayed (Mohammed bin Zayed) can successfully capitalize on the economic crisis in Turkey, the Eastern Mediterranean natural gas field can finally be developed and put on the market
- Although this is a win-win situation for the UAE, it is unclear whether Erdogan is willing to take the necessary measures to ensure progress in the region
At a time when the media and financial analysts were fully concerned about oil futures, the natural gas market changed again. Due to some ongoing regional developments, Eastern Mediterranean natural gas futures appear to be rising. The unexpected but very successful visits to Turkey and Egypt by Crown Prince Mohammed bin Zayed of Abu Dhabi are likely to have a long-term impact in the region. The multi-billion agreement signed by Turkey and the UAE, especially the long-term investment agreement between Turkey’s sovereign wealth fund and UAE companies such as Abu Dhabi Port, seems to usher in a new era of cooperation in the region.
However, the overall optimism shown by Turkish and Abu Dhabi media sources should be reserved, as financial transactions may not be able to offset the ongoing power between Turkish President Erdogan and Abu Dhabi Crown Prince Mohammed bin Zayed struggle. Both countries support political, military and economic power projects in the Eastern Mediterranean and the Middle East and North Africa to increase their influence. Turkish President Erdogan regarded his first visit to MBZ in 12 years as a major victory. His regional power dramas are still the focus of controversy in Abu Dhabi, Cairo and Athens. Although Turkish media sources are very optimistic about the thawing of the relationship, participants in other regions have been looking forward to knowing the true results of the meeting.
MBZ’s actions have nothing to do with major changes in regional geopolitics, but are based on geoeconomics. Considering the terrible state of the Turkish economy, high inflation rate and the continued plummet of the Turkish lira, the Erdogan Empire faces a real threat of unrest. MBZ is a master at identifying and understanding win-win situations. It is a wise move to open a direct route to Turkey, especially the embattled AKP government with Erdogan. The Turkish economy urgently needs cash, not only foreign direct investment to support the lira exchange rate, but also emerging AKP projects. Arab investors are very willing to participate in the ongoing Turkish asset sale. Large-scale energy, infrastructure and financial assets are available for rush purchases at prices much lower than a year ago. MBZ also knows that by investing in Turkey, Ankara’s ties with other countries will be destroyed.
When you understand MBZ’s trip to Turkey as a coordinated effort between the geo-economic and strategic military interests of the UAE, Egypt, Israel, and most likely Greece, it will become more and more interesting. Before flying to Turkey, MBZ will have discussions with Egyptian President Sisi, Israeli players and Greece. The UAE understands that it can use Turkey’s financial crisis to act as a bridge between the two sides of the Eastern Mediterranean. The UAE, especially the Crown Prince of Abu Dhabi, is behind the signing of the Abraham Agreement with Israel, is a major investor in Egypt, and is eager to invest in Greece and Cyprus. These factors mean that MBZ has become one of the protagonists of the Eastern Mediterranean.
Investment, security and energy are interrelated here, because all bilateral and multilateral agreements are based on these issues. Abu Dhabi’s ADNOC, Mubadala, and even its defense companies are all related to Egypt, Israel, and Greece. The UAE’s advantages in cooperation and support with the Eastern Mediterranean Gas Forum (EMGF), which hopes to become its member, are obvious. Not only can it open up new super-regional energy projects, but it will also significantly improve the overall security situation. Mubadala and AD Ports are now even participating in projects and discussions with their Israeli counterparts. Mubadala’s acquisition of 22% of Israel’s Tamar offshore gas field for US$1 billion is just one example. It now appears that MBZ’s meeting with Erdogan in Ankara should be evaluated based on the supra-regional aspirations of the UAE, EMGF and Abraham Agreement. By establishing and strengthening the ongoing Eastern Mediterranean Alliance, while opening up discussions and investment in Turkey, Abu Dhabi not only opens up a path to win-win success, but also reduces Turkey’s aggressive regional ambitions. Looking at Turkey’s bleak financial outlook, Erdogan understands that he cannot reject the progress of the UAE.
For EMGF members, especially Egypt, Israel and Cyprus, Abu Dhabi’s more direct and active participation in Turkish affairs is a potential advantage. The financial strength of UAE investment funds should not be underestimated, especially at a time when the financial market we saw in Ankara collapsed. All of this may force Erdogan to take a less confrontational stance on offshore gas exploration in the Eastern Mediterranean. For both parties, this may be a real win-win situation. Due to the energy transition and geopolitics, some of East Med’s options for offshore natural gas and liquefied natural gas have hit a wall. By eliminating political risks or mitigating potential Greek-Egypt confrontations with Turkey, investors and operators may be incentivized to return. For Ankara and EMGF, this may even lead to Turkey becoming the main market for LNG in the region.
Due to Turkish military and political intervention, especially in connection with the Muslim Brotherhood in Egypt, any energy relations between the two countries have been put on hold. Some analysts believe that MBZ and Erdogan have discussed the future of the Muslim Brotherhood in recent days. The economy may persuade him to change his position. Egypt and even Israel may follow the example of MBZ and re-engage with Turkey. At the same time, the ongoing European energy austerity has opened up new LNG and pipeline natural gas markets, so Turkey is really just the cherry on the cake.
MBZ has taken the first step, but everything depends on Erdogan’s supporters. Erdogan will have to withdraw support for the Muslim Brotherhood parties in the region, soften Assad’s Syria, reduce Turkey’s military support for Qatar, and leave the future of Libya to the Libyans before full reconciliation. However, it is clear that the geo-economy is becoming an increasingly important factor in the region.