Chevron's regional responsibility

Offshore mediterranean gas: Reuters
Offshore mediterranean gas: Reuters

The US energy giant must see the political as well as business need for a swift settlement with Cyprus on the Aphrodite-Ishai field.

Chevron's entry into the eastern Mediterranean in general and into Israel in particular is a very important move. It represents an expression of confidence in the proven potential of energy in the region, as well as the understanding that the political circumstances that have arisen in the region in the past few years serve the economic interests of the company. This also serves as a message to other large international companies that it is worth joining the "Energy Club" in the area.

It goes without saying that, even for Chevron, this is a challenging and complex region, both politically and strategically. The countries concerned, like the region as a whole, have undergone dramatic upheavals in recent years. At the same time, however, largely in the face of the geopolitical changes, an impressive regional architecture has developed: bilateral and tripartite collaborations between Israel, Greece and Cyprus, and the establishment of the Regional Gas Forum, in January 2019, with seven member states and additional observers.

As is well known, Chevron purchased US company Noble Energy, thus becoming a major player in the Israeli energy market, in particular because of its ownership of the largest gas fields discovered in recent years, Tamar and Leviathan. Chevron is bidding on additional tenders that are on the agenda and is also a partner in the Aphrodite-Ishai gas field, a joint Israeli-Cypriot field.

Companies of the size of Chevron also play a political role, because of their involvement in such large projects in an area where there are significant political-strategic implications. Chevron is aware, of this and understands well the rules of the game, its interests and capabilities, and addresses this extensively in its published reports. For example, in one of its reports, the company states, "Chevron strives to maintain positive, constructive relationships with policymakers and their staff. Our engagement aims to deliver recommendations on policy matters such as the economy, climate change, environmental regulations, energy development and security, international issues, and research and energy transition."

The Aphrodite-Ishai gas field, shared by Israel and Cyprus, is an issue in which Chevron must consider the political angle no less than the economic aspect. As is well known, the two countries did not reach a unitization agreement, as is customary and common in the global energy industry. The two governments recently instructed the companies involved, on both sides of the maritime border, to negotiate for a period of a year in order to reach agreements between them. The negotiations are taking place at the moment, but sluggishly, and the clock is ticking.

Chevron, as a powerful and influential player, and also as an American company that gains attention in the White House, needs to exercise political responsibility, beyond the purely commercial aspect. Chevron's interest, as well as the strategic interests of the players involved - Israel, Cyprus and the US - is to reach a proper and fair agreement shortly. This is not just a commercial agreement. It has political importance and will send a message in an area saturated with challenges and rivalries in the Eastern Mediterranean. The other countries in the region are looking with great interest at how the question of Aphrodite-Ishai will be resolved, especially in light of the fact that these are two countries, Israel and Cyprus, which have greatly strengthened their relationship in recent years. The US has clear interests, and a responsibility for stability and promotion of regional cooperation.

It is sufficient to mention the dispute between Lebanon and Israel, two countries that are officially at war, over their maritime border. In recent years, US mediation has aimed at reaching a compromise in an attempt to remove a stumbling block that could intensify into escalation, in the absence of consent, in light of the multitude of players in the region who have conflicting interests. It is probable that a similar issue, of common fields, will also arise in the Lebanese-Israeli context at one stage or another.

It is precisely in this context that the manner in which the Aphrodite-Ishai question is settled is extremely important. Beyond the commercial-economic aspect, which is very important in its own right, it could, and maybe should be seen as a message about how states resolve disputes. This is true for every region in the world, and especially for our region. Chevron has a unique opportunity, as well as responsibility, to chart a path in this regard. It should push for a proper, fair agreement, sooner than later.

The writer is a former ambassador of Israel to Cyprus, and served in various other senior positions in the Ministry of Foreign Affairs. He is a lecturer on Political Science at Yezreel Valley College, and a consultant on strategy, policy planning and energy.

Published by Globes, Israel business news - - on July 5, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Offshore mediterranean gas: Reuters
Offshore mediterranean gas: Reuters
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