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A large pocket of offshore natural gas could shift Eastern Mediterranean geopolitics on its head. As the threat of war looms between Israel and Iran, the newly found gas could add extra friction between the two countries.
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Last year, Houston-based Noble Energy discovered vast tracts of natural gas off the coast of Israel and Cyprus. It had been exploring for 13 years.
So far, the find has been a bonanza, especially for energy poor Israel. Noble has found 35 trillion cubic feet (tcf) of natural gas. By September, this offshore find could yield as much as 100 million cubic feet of gas a day.
"It is a great advantage for Israel," Dilshod Achilov, assistant professor of political science at East Tennessee State University, said in an interview.
Investors have taken notice: the Tel Aviv 100 Index has gained more than 4 percent so far this year. Shares of Noble Energy have nearly doubled over the past year and are trading around their 52-week high of $105.
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Meanwhile, the price of a barrel of oil was $105.95 Wednesday as fears of conflict in the Middle East continued.
For the first time since its founding in 1948, Israel could become self-sufficient in energy and even an exporter. Israelis for years joked that God made a mistake leaving them contemporary Israel as a "promised land" when it was surrounded by oil-rich neighbors like Saudi Arabia.
But now, Israel's government is debating whether or not to set export quotas, Israeli newspaper Haaretz reported. The country of 7 million is also considering setting up a sovereign wealth fund for its citizens.
Iranian President Mahmoud Ahmedinejad in his repeated denunciations of Israel has never mentioned this potential competition. Instead, he's focused on Iran's plans to develop nuclear energy, which Israel fears would lead to atomic weapons to threaten its security.
Possible Pipeline to Greece
Jerusalem expects to have an oversupply of natural gas which Israel could use to forge international agreements within the Mediterranean and with energy giants like China and Russia, Haaretz said. Israel now enjoys excellent relations with both countries.
Prime Minister Benjamin Netanyahu traveled to Cyprus last week to talk about energy. He met with Cyprus's ethnically Greek President. The island nation is planning to build a natural gas treatment plant that would be jointly operated by Noble Energy and Israel's Delek Group.
Last year, Netanyahu flew to Greece for discussions about possible construction of an undersea pipeline. Now that the Athens government has fallen as a result of the euro zone crisis, the status of any tentative deal reached with former Prime Minister George Papandreou remains unclear.
Delek, the Tel Aviv-listed vehicle of Isaac Tshuva, 64, a Libyan-born immigrant to Israel who made his first pile in real estate and later bought New York's Plaza Hotel, is Israel's biggest energy company. Delek has energy investments worldwide. Its prominence has received attention.
