(JNi.media) Israel’s delays in giving a green light to exploiting its natural gas resources were inadvertently costing its Cypriot neighbors. “The Cyprus Aphrodite field, with just 4.5 trillion cubic feet (tcf), is not big enough to export by itself,” according to Fiona Mullen, director of consultancy service Sapienta Economics, who explains: “It needs Leviathan gas, at around 20 tcf to make the economies of scale work.”
But Mullen says there’s hope yet for Cyprus from the Israeli natural digs which have been the bone of contention between Israeli parties in and out of the coalition government. “Recent developments suggest that it is time to ask if the gas window has in fact inched open again,” she writes in In-Cyprus this Sunday.
“Gas production from the Leviathan field has been held up by a big regulatory row, driven by concerns [inside Israel] that Delek and Noble, partners in both the Tamar and Leviathan fields, would control too much of the market,” Mullen notes. In fact, only this past Saturday night has seen demonstrations by thousands of Israelis in several cities, protesting the current legislative path of the Netanyahu government regarding the drilling.
“The blow came in December 2014,” Mullen recalls, “when the Israeli antitrust commissioner, David Gilo, refused to endorse a deal that would have allowed Delek and Noble, partners in Leviathan, to start production. Gilo decided that the partnership in Leviathan constituted a monopoly. The decision meant that Noble and Delek would not be able to finalize any deals on gas exports and would probably have to sell their interest in Leviathan.”
Fast forward to November 2015, with regulator Gilo out of the picture and Economy Minister Aryeh Dery, who objected to the proposed deal with the producers, having resigned last week, may be the first good news Noble and Delek–and, by extention, Cyprus–have received in almost a year.