2nd Gulf Intelligence Levant Energy Forum

All sides will lose out if “gunboat diplomacy” leads to confrontation over the Eastern Mediterranean’s offshore oil and gas reserves, a key player in the regional energy industry warned on Tuesday.

Speaking at the 2^nd Gulf Intelligence Levant Energy Forum, Leading Energy Expert Roudi Baroudi urged the several countries with claims in the area to focus first on what can be done without exacerbating tensions and then on how disputes can be resolved peacefully.

“None of the countries involved can afford to have its economic fortunes sunk by gunboat diplomacy,” Baroudi, CEO of Doha consultancy Energy and Environment Holding, said on the sidelines of the event. “The value of the energy deposits in question is nothing short of gargantuan, so there’s plenty to go around. Negotiating mechanisms for dispute resolution and joint development wouldn’t be easy, but the payoffs – for all concerned – would be enormous.”

Organized by Gulf Intelligence, a Dubai-based communications firm focused on the regional energy industry, the Forum was hosted by the University of Cyprus and attracted a long list of high-profile guests, including Cypriot President Demetris Christofias and Lebanese Energy Minister Gebran Bassil. Major international energy companies, keen to join in any discussions of how to tap one of the most promising oil and gas finds of the past decade, were also represented.

Baroudi’s comments echoed his presentation to the Forum, which stressed dialogue and cooperation as means of maximizing benefit from the Levant Basin. At average prices for the current year, the deposits in question were recently estimated to hold USD 170 billion worth of oil and a staggering USD 1.9 trillion worth of gas. For perspective, the latter figure amounts to 13% of all the goods and services produced in the United States in 2010.

Given these stakes, Baroudi told the Forum, “the economic losses resulting from the disputes are obvious.”

He has proffered several steps that would allow for peaceful resolution of disagreements, faster exploration of the undersea fields in question, earlier and higher revenue flows and promoted neutral zones to be declared by the United Nations for joint developments once applicable.

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Baroudi, who also serves as secretary-general of the World Energy Council’s Lebanon Member Committee, has urged all parties to at least start defining their Exclusive Economic Zones (EEZs), and to place their trust in the United Nations Convention on the Law of the Sea (UNCLOS)and the International Court of Justice when it comes to adjudicating disputes over maritime boundaries. He also wants a revitalized Euro-Med Partnership to help take the lead in finding creative economic solutions that won’t prejudice any political negotiations in the future.

UNCLOS enjoys broad participation around the globe, with almost 150 countries having already become signatories, making it a logical foundation for the establishment and regulation of maritime boundaries between neighboring states. Those that ratify the convention also gain access to several UNCLOS institutions, including the International Tribunal for the Law of the Sea, the International Sea Authority, and the Commission on the Limits of the Continental Shelf, all of which can help reduce frictions over territorial disputes, promote joint development, and buttress efforts to attract foreign investment.

“For as long as the huge potential in the disputed zones remains untapped,” Baroudi said, “East Mediterranean countries will be depriving their citizens of economic progress.”

Any negotiating process will be complicated by numerous obstacles, including the various claimants’ differing stances on UNCLOS, the absence of diplomatic relations between several of the countries in question, and political uncertainty in Egypt and Syria. Lebanon and Israel, for instance, have traded several barbs over the issue, and just days ago, media reports indicated that Turkey had scrambled two fighter jets after three Israeli warplanes buzzed a Turkish ship in waters claimed by the government in Nicosia, which Ankara does not recognize.

For Baroudi, such disagreements and the incidents that typify them only underscore the need to keep the gunboats in ports and launch some sort of dialogue. He added also that he had great hopes for the Cypriot presidency of the European Union starting July 1st that it would definitely bring courageous diplomatic dialogue to mend off our maritime territorial disputes.

“There is no upside to conflict in this case,” he said. “The peoples of the region need those revenues now, and any delay only diminishes their impact.”