Amidst regional conflict and uncertainty, Chevron’s East Mediterranean gas assets face a challenging future. Chevron, alongside its partners NewMed Energy and Ratio Oil Corp., discovered the Leviathan Gas Field back in 2010, which is one of the largest deep-water gas fields in the world. With an impressive 22.9 trillion cubic feet of recoverable gas, Leviathan is a significant asset in the region, along with Chevron’s stake in the Tamar Gas Field and partnership in the Aphrodite Gas Field.
The Tamar Gas Field, located just 47 kilometers north-east of the Leviathan field, plays a crucial role in meeting Israel’s energy consumption needs, supplying 70% of its electricity generation requirements. Chevron owns a stake in the Tamar Gas Field, along with other partners. Additionally, Chevron and NewMed Energy have partnered with Shell in the Aphrodite Gas Field, which is located south of Limassol in Cyprus.
Chevron’s East Mediterranean assets account for approximately 10 trillion cubic feet of the company’s global natural gas resource base. Despite the ongoing regional conflict and challenges, Chevron remains committed to developing its gas assets in the region. CEO Mike Wirth stressed the importance of taking a long-term view and mitigating risks to ensure the safety and integrity of operations.
Recent developments, including the war between Israel and Hamas, have impacted gas production at the Tamar gas field. Israel suspended production and redirected supplies through a pipeline in Jordan instead of a direct subsea pipeline to Egypt. Chevron had requested to export gas through an alternative pipeline called the Arab Gas Pipeline (AGP), which connects Leviathan to Jordan and Egypt. However, exporting gas through the AGP comes with significant risks and challenges.
Experts are warning that a severe degradation of the investment climate and energy flow disruptions could occur if war breaks out along Israel’s border with Lebanon, potentially involving Iran. The Arab Gas Pipeline is a critical energy infrastructure under threat in such a scenario. Disruptions to gas flows via the AGP would particularly impact Jordan, which imports over 90% of its energy needs and relies on gas deliveries through Israel and Egypt. Egypt also depends on Israeli gas imports for domestic demand and re-exports, which contribute to its scarce foreign currency reserves.
In a separate development, British oil and gas multinational BP remains committed to its $2 billion deal with Abu Dhabi National Oil Co. (Adnoc) to purchase a 50% stake in Israeli gas producer NewMed Energy. However, the deal faces uncertainty due to the ongoing conflict in Gaza. An independent panel recommended raising the asking price by 10%-12%, potentially causing further delays in the deal’s completion. BP and Adnoc executives anticipate a resolution when the political situation improves and civilian casualties decrease.
In conclusion, Chevron’s East Mediterranean gas assets face an uncertain future due to the regional conflict and challenges in the area. While Chevron remains committed to developing its gas fields, the ongoing conflict and potential disruptions to energy flows pose significant risks. Additionally, the deal between BP and Adnoc is in limbo due to the conflict, with the outcome depending on improvements in the political situation.
