Thursday, January 12, 2017

LEBANON AND SYRIA: STUCK BETWEEN A ROCK AND A HARD PLACE ON NATURAL GAS

By Antonia Dimou*

Originally Published by Modern Diplomacy, 
January 12, 2017 

(Photo from Modern Diplomacy)

The East Mediterranean’s gas resources can promote cooperation, resolve conflicts and turn the region into an energy hub presenting new prospects for Lebanon and Syria.

Lebanon is currently in need to diversify its energy mix away from oil in order to strengthen its security of supply but lags behind neighboring Israel and Cyprus in developing its gas reserves in the East Mediterranean. 3D seismic surveys carried out by the Norwegian Spectrum company have estimated recoverable Lebanese offshore gas reserves at 25.4 trillion cubic feet. The development of Lebanon’s hydrocarbon resources nevertheless faces significant challenges at political and economic levels, namely the skyrocketing public debt, an unstable regulatory framework, and a weak administration attributable to the sectarian nature of the country’s political system.

The January 4th 2017 approval by the Lebanese cabinet of two decrees is considered critical to ignite the engines of gas exploration and production given that they provide the delineation of the offshore area into 10 blocks; the establishment of production-sharing contracts; the specification of tender protocols; and, the model exploration and porduction agreement (EPA) so that the first licensing round for offshore gas exploration becomes feasible and Lebanon catches up energy synergies in the East Mediterranean.

The commercial attractiveness of Lebanon’s gas resources is evidenced in the registration of interest by twelve operators and major oil companies such as Chevron, ExxonMobil, Shell, and Total in the prequalification round of 2013. But two main prerequisites are critical for the transformation of the Arab country into a gas producer. First, the Lebanese government needs to be held accountable and push for effective public consultation in that the bidding process is transparent and that contracts are sufficiently completed. Second, anti-corruption safeguards for the gas industry in Lebanon are necessary to be created to standardize binding rules for licenses and contracts with: (a) penalties on companies which provenly secure contracts through bribery; and, (b) the ability of companies to exercise supervision over one another for competitive reasons. Anti-corruption mechanisms can also include the creation of sovereign funds that take part of the gas profits and allocate them to the development of infrastructure projects and to the decrease of national public debt thus favoring economic growth.

On a broader regional setting, existing overlapping maritime claims between Lebanon and Israel over an 854 square kilometers area are hampering trans-boundary gas sharing initiatives on exploration and production. American mediation efforts thus far have failed to resolve the maritime dispute but reduced the risk of escalation by succeeding in dispiriting Lebanon and Israel from exploring gas fields and awarding contracts. The delineation of the maritime border is notably crucial for gas exploration given that oil and gas companies assess security and political risks before investing.

Also interestingly, delays in the Lebanese decision making process can close market-transformative opportunities, hinder joint monetization with Egypt and possibly Cyprus, and accelerate competition with new entrants in the regional gas market, such as Iran and Australia. For the conclusion of long-term gas supply contracts, the discovery of sufficient gas quantities in the ten blocks of the Lebanese maritime area is important. This is especially crucial when taking into account that by the time Lebanon comes on stream, a major gas market share will be locked up, thus limiting the Arab country’s ability to create gas price competition. No doubt that in the existence of a compact regulatory framework and a strong political leadership, regional energy arrangements will not likely bypass Lebanon.

Coming to neighboring war-torn Syria, the country can prove to be a sigificant regional energy player. Damascus overall undiscovered gas potential looks promising in accordance with French CGGVeritas acquisition of 2D seismic data on offshore Syrian resources in 2005 and subsequent 2011 evaluation that three offshore blocks in the Mediterranean Sea by the Syrian coast are expected to hold multi trillion cubic feet of gas.

Among various interests, geopolitics of energy seem to dominate the crisis in Syria. Foreign powers battle control of natural gas resources and the trade routes that bring energy to consumers. Conflicting energy interests in Syria are demonstrated by Russia, Qatar and Iran. Russia seeks to maintain investments in the energy sector in so-called “Safe Syria,” which is a promising zone of natural gas reserves in the territorial waters off Syria’s Mediterranean coast. The significance that Russia attributes to joining the East Mediterranean energy game is underlined by the fact that energy giant Gazprom has reportedly taken over the gas exploration and drilling rights off the Syrian coast from Russian state-controlled Soyuzneftegaz, which in 2014 signed a 25-year agreement with the Syrian government that concedes exclusive exploration rights in Syria’s EEZ.   

Qatar’s energy agenda in Syria contradicts Russian and Iranian interests as it includes a pipeline that would connect Qatar and Turkey through Syria, in order to join the Nabucco pipeline and ultimately reach Europe. For its part, Iran’s energy strategy centers on the Iran-Iraq-Syria Islamic pipeline project, originally signed in 2011. The project is intended to transport Iranian gas through the Gulf to Iraq, then to Syrian and Lebanese ports, with Europe as the final destination.

Noteworthy, Syria contains a number of gas fields that have been periodically seized by the Islamic State, principally in Palmyra, a city that serves as transit for pipelines carrying gas from fields in Hasakah and Deir Ezzor provinces in northeastern and eastern Syria respectively. The regime’s control of Shaer field, the largest field northwest of Palmyra that feeds the national grid, is considered significant because it impedes the Islamic State from amassing further disproportionate rewards compared to its limited investment of combat manpower.

The “pipelization” of Syria is a reported reality. Thus all efforts should direct to the resolution of the Syrian conflict as a prerequisite not only  for the development of the country’s untapped offshore gas resources but most significant for attracting foreign investment.

No doubt that as the cases of Lebanon and Syria show, potent decision making, cooperation and conflict resolution are critical for the region’s gas potential to be unlocked in a way that promotes economic growth and sustainable development for the benefit of current and future generations. 

Saturday, January 7, 2017

The Crisis in Syria: Diplomacy, Regional Challenges and Options


MONOGRAPH By Antonia L. Dimou

Being written in the region as the Syrian crisis sparked, flared and spread, this monograph makes no pretence about providing answers to complex issues addressed, thus aiming to increase understanding through a series of conducted interviews with officials, international relations experts from the region, Baathist and Islamic figures as well as Syrian oppositionists. While focusing on the first ten months of the crisis in Syria, the monograph is more timeless than ever!


The Monograph can be accessed at:
https://issuu.com/toniadimou/docs/crisis_in_syria_by_antonia_dimou

INTRODUCTION  (pp.6-13)

The massive wave of protests throughout the Middle East in spring 2011 set off the wind of political and economic reforms, and has engulfed most of the states of North Africa and the Middle East with spreading effects into Syria. Syria has been motivated by the momentous events in Tunisia and Egypt which inspired protests on its soil demanding economic and political reforms and illustrating the potential of genuine democracy, or more accurately, democratization from within.   

However, the Syrian regime’s violent response on protestors prompted them to reject the Syrian government’s initial enact of reforms most prominently the lifting of the state of emergency in effect for nearly fifty years, the introduction of a new media law, and the granting of citizenship to stateless Kurds. Most importantly, state violence prompted protests to evolve into insurgency. Specifically, in the case of Syria, as violence escalated, insurgent tactics eventually replaced protest tactics, turning into an asymmetric warfare against the Syrian state. As the situation stands nowadays, the death toll is staggering and the destruction is reaching catastrophic proportions in the Arab country.  

Therefore, the development of a “coalition of the able” for Syria to include the US, the EU, Russia and certain Arab countries to develop a comprehensive strategy and a set of actions to end the crisis in Syria is more relevant than ever before. The strategy could include coordinated diplomatic efforts to implement a reconciliation process, and insure a smooth political transition so that protracted conflict is ended.   
In this political thinking context, the current monograph focuses on the first ten months of the crisis in Syria (March 2011 till December 2011). Being written in the region as the Syrian crisis sparked, flared and spread, this monograph makes no pretence about providing answers to complex issues addressed, thus aiming to increase understanding through a series of conducted interviews with officials, international relations experts from the region, Baathist and Islamic figures as well as Syrian oppositionists.   

As evidenced during the conduct of research, the debate on Syria reflects the deepening divisions between two camps; the first camp supports opposition to the Syrian regime and the second wishes for the maintenance of the current status quo in fear of dire regional repercussions. This kind of debate is reflected in the evolution of the US policy vis-à-vis Syria of the last three decades. The Reagan Administration defined American policy towards Syria through the prism of Cold War realism and even though the Arab country was included in the list of state-sponsors of terrorism since 1979, it was considered geopolitically important and engagement between the two countries flourished. 

In the post-Cold War framework, the George H. Bush Administration considered Syria a key pillar for the cementing of the regional balance of power and sought for the engagement of Damascus in the US-led alliance against Iraq in the Gulf War of 1990–1991. Later on, the Clinton Administration considered Syria as major component of any Middle East peace negotiations and a series of presidential summits took place with the last one in Geneva in March 2000 between then American President Bill Clinton and the late Syrian President Hafez al-Assad. 

For its part, the George W. Bush Administration initially employed neoconservative tools that supported approach to Syria through isolation but geopolitical realities led to the prevalence of traditional practice; Syria’s cooperation in the post-September 11th era against al-Qaeda demonstrated avenues for cooperation between Washington and Damascus in the wider Middle East. Coming to the Obama Administration, the presidency was initially marked by a pragmatist policy towards Syria encouraging high-level visits and filling the diplomatic vacuum that existed since 2005, by appointing an American ambassador in Damascus. 

The current crisis in Syria contributed to the differentiation of the American presidency with the imposition of a new round of sanctions against members of the Syrian regime, however, there are estimates that instability in Syria and its spill-over effects have to be contained in the name of realpolitik since there are increasing fears that a regime change in Syria would look a lot more like Iraq in 2003 rather than Egypt in 2011.  

In the search of peace and conflict, this monograph begins with an assessment of the situation in Syria endeavoring to picking up the missing pieces of the puzzle since President Bashar al-Assad came to power in 2000.  Initially, the Syrian president set out to modernize the economic and technological foundations of the inherited system shelving archaic technology and trade regulations, easing banking restrictions and enabling the private banking sector to expand. Some timid signs of a political outreach have taken place to satisfy the rising Islamic religious sentiment and the Kurdish ethnic minority, while concurrently the old guard of the security and military apparatuses was replaced by a new generation of top echelons. 

In terms of foreign policy, its major components were dominated by realism and have gained popular support over the years however external policy-making has not been enough to avert protests domestically. Perceived as token of artistry, Syria has been the only country on the American State Department’s “terrorism” list that has maintained full diplomatic relations with the US, and though Syria maintained close relations with the former Soviet Union during the Cold War, the Syrian leadership made sure that it met with all American Presidents from Nixon to Clinton. Parallely, while Israel occupies the Golan Heights for the last forty years, no attack against the State of Israel has taken place from Syrian territory.   

Undoubtedly, the major weaknesses of the Syrian regime have been the systemic corruption that created powerful elites and the slow pace of political reforms that were only minor and cosmetic. These weaknesses have presented the keystone of the popular protests with demands for democratization. The pursue by the Syrian regime of a dual strategy responding violently against protests on the one hand and granting mediation roles on the other hand is considered as effort to resolve conflicting interests, while concurrently exploiting fears and hopes.  

This monograph continues with an account of the Arab League, the EU and the US sanctions against Syria raising questions on their ultimate efficiency. Economic sanctions as a public policy tool is analyzed stressing their limitations as according to lessons learnt in contemporary politics, “the greater number of countries needed to implement the denial measures, the less likely sanctions will be effective”. In this respect, it is examined how vigorously Iraq, Syria’s largest Arab trading partner, which did not vote in support of the Arab League sanctions, would implement the measures. Similarly, Lebanon, with its complex economic ties with Syria regularly described as one large “pool” in which labor, commodities and money flows unimpeded, gives rise to worries on the ramifications that sanctions may have on its own economy and on its ability to ultimately enforce the set of punitive measures. A detailed account is also made to Iran which represents Syria’s strongest economic lifeline ranging from energy to construction predicting that the threat which sanctions pose on the Syrian economy will extra precipitate the power balancing strategies of Iran and Syria. 
  
In its course, the monograph looks into Turkey and its central role towards Syria through the employment of its ideological foreign policy elements; neoottomanism and the zero problems/conflicts. Since Turkey defines its foreign policy in mathematical terms, the results of that policy are measured in the same terms, reaching the empirical realization that Ankara has not been able to successfully apply the “zero problems/conflicts policy” not only to neighboring countries, but most importantly, to its own Southeast with the promotion of the National Unity project. It is no secret that Turkey envisioned to patron the Arab spring through the exploitation of neo-ottomanism, an ideology that solidifies its aspirations to re-engage estranged neighbors and to serve as mediator in conflicts in the Middle East and elsewhere. 

In pursuit of its standing as a leading Muslim country that determines the regional currents, Turkey decided to uniquely position itself in the case of Syria. Ankara’s regional motives of the unfolding policy vis-à-vis Syria are identified as intentions to outweigh Iranian regional influence and as commitment to consolidate regional dominance. Concurrently, a detailed account is provided with regards to Turkey’s efforts to internationalize the crisis in Syria by hosting a series of opposition meetings and being instrumental in the formation of the Syrian National Council, while a linkage is made with regards to Turkey’s domestic agenda and its relevance to Syria. Evidently, Turkey is made vulnerable by instability, therefore, its foreign policy strategies can not remain static and are mostly driven by the need to provide nuanced responses to undergoing developments in the region.           

In the process, the monograph focuses on the Hashemite Kingdom of Jordan whose position as a bridge between the Levant and the Persian Gulf has provided it a unique geopolitical standing in the Middle East, in a way that nowadays Amman is granted with a significant diplomatic and humanitarian role with regards to the situation in Syria. In fact, Syria represents a kind of litmus test for Jordan which throughout the crisis has adopted the policy of active neutrality that is divided in two parts. The first part is a proactive effort to prevent the outbreak of war in the region with the exercise of diplomatic discourse to cement a unified Arab position in the Arab League context and beyond. The second part is the attempt of Jordan to turn itself into a safe haven for refugees and a scene for political settlement, thus minimizing fears that the crisis may undermine the Kingdom’s own political stability and extra weaken its already embattled economy. A presentation of the interlinked Jordan-Syria economic relations is provided with an eye on the feasibility of the Arab League sanctions against Syria and the progressively negative impact of sanctions on the Kingdom’s economy overall.   

Out of the turbulent events in Syria, Jordan took practical steps to unleash a political reform process to strengthen pillars of democracy and widen public participation in decision making. It has become crystal clear that the major differentiation of the Jordanian events from those in Syria and the rest in the Arab world is that protestors are asking for reform of the current system, not its abolition. Jordan has an important record on reform initiatives which were delayed due to major regional events. Notably, in the pre-Iraq war period, the Kingdom initiated the “Jordan First-Al Urdun Awlan” campaign, which attempted to articulate a comprehensive vision of economic and political reforms. The initiative provided the formation of a national committee to deal with different economic and political issues and debated five distinct themes, namely the possibility of establishing a constitutional court; the introduction of a parliamentary quota for women; the enactment of anti-corruption measures; the drafting of a new political parties law with the aim of ending the state of fragmentation among political parties; and, the setting of rules to cover relations between civil society, professional organizations and the state.   

Equally significant reform initiative was the 2005 Jordanian National Agenda, a blueprint for political, economic and social reforms that envisioned approaching the reform process in a holistic, rather than a piecemeal, way. The committee of the National Agenda consisted of representatives from political parties including the Muslim Brotherhood, the parliament, civil society, women activists, the media, the government and the private sectors, and reached recommendations in three interdependent areas, namely the economic and social policies, basic rights and freedoms, and state infrastructure. In the field of political reforms, the National Agenda proposed new laws to open up elections and prevent discrimination against women. 

In July 2006, the government of then Prime Minister Maarouf Bakhit assembled a forum of 700 participants over a two-day period to address the political, economic and social challenges facing the Kingdom. Capitalizing on the findings of the National Agenda, participants produced the "We Are All Jordan – Kulna al Urdun" document. The document was a clear attempt at political reform and selected a list of fifteen priorities. The major three were loyalty and nationalism, sovereignty of the state and the protection of national interests, and national security. The Bakhit government undoubtedly showed significant legislative initiative. Specifically, in November 2006, it passed an anti-corruption law that established an anti-corruption committee with broad powers. The law notably included in its definition of corruption actions related to nepotism (wasta).

Coming to today's situation, the monograph describes Jordan’s speedy and practical steps to unleash a deep political reform process which aims to reflect the Kingdom’s vision of comprehensive reform, modernization and development in a way that can be translated into realities on the ground and provide a blueprint for a better future, not only for the Jordanian people, but for the people of the entire region.  

Last but not least, the monograph focuses on what happens next and the challenges ahead by inquiring four distinct scenarios that could have extensive ramifications for regional competitors and allies. The first scenario concentrates on the possible reaction of Syria and its allies on war threats, the second on the export of the Syrian crisis in Lebanon, the third scenario on regime change in Syria and the major challenges that will surface not only in the Arab country but in the whole region, while the fourth scenario deals with regime survival in Syria. It has become an increasingly common understanding that whether the current regime remains or changes, the Middle East will be affected multiply with focus on Iran’s regional standing, the power perception of major western powers, the posture of Israel in the context of a turbulent area, and stability in neighboring countries particularly, Jordan, Lebanon and Iraq.  

Undoubtedly, the debate on Syria reflects not only divisions but most importantly the realization that political clocks cannot be turned back; too much political mobilization has occurred for the status quo ante to come to the fore intact.