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22 May 2020 | 11:07 UTC
FEATURE: Prospects uncertain for further East Mediterranean gas development
CommodityCoal , LNG, Natural Gas, Oil
HIGHLIGHTSIOC drilling off Cyprus on hold after cuts
Lebanon offshore could be non-starter
Carbon constraints could leave gas stranded
London — Despite sitting on trillions of cubic meters of gas, the prospects for the wide-scale development of the East Mediterranean remain uncertain, with drilling plans on hold, a setback for Lebanon's fledgling exploration program and stubborn geopolitical challenges.
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Add to that the likelihood that within a decade — or sooner — European consumers will be far more exacting when it comes to the carbon footprint of natural gas, then it may eventually turn out that some of the region's gas will remain in the ground.
Recent disappointments have done nothing to improve the near term outlook either, and existing projects are struggling faced with the impact of the coronavirus outbreak on gas demand and company spending.
Demand for gas from the giant Tamar and Leviathan producing gas fields offshore Israel is expected to fall by up to 9% over the next 18 months, while Egypt has not exported an LNG cargo since March.
2020 was also expected to mark the resumption of drilling offshore Cyprus, with dozens of wells planned, as IOCs looked to prove there was enough gas for a significant Cypriot industry to emerge.
But activity has all but ground to a halt, with drilling by players such as France's Total, Italy's Eni and the US' ExxonMobil postponed until at least next year.
Meanwhile, a first well offshore Lebanon came up dry, triggering fears that any offshore gas development there could be a non-starter.
The only ongoing drilling activity of note, in fact, is by Turkey's state-owned TPAO in Cyprus' Block 6, which has been denounced by the international community, threatening further the fragile geopolitical balance in the region.