The Israeli veto led to the intervention of British Prime Minister Tony Blair, who sought to broker an agreement that would satisfy both the Israeli government and the Palestinian Authority. The result was a 2007 proposal that would have delivered the gas to Israel, not Egypt, at below-market prices, with the same 10% cut of the revenues eventually reaching the Palestinian Authority. However, those funds were first to be delivered to the Federal Reserve Bank in New York for future distribution, to guarantee that they would not be used for attacks on Israel.[1]
Development status under Hamas administration
The Israelis pointed to the 2006 victory of the militant Hamas party in Palestinian elections as a deal-breaker. Though Hamas had agreed to let the Federal Reserve supervise all spending, the Israeli government, now led by Ehud Olmert, insisted that no “royalties be paid to the Palestinians.” Instead, the Israelis would deliver the equivalent of those funds “in goods and services.”[1] The Hamas-led Palestinian unity government refused the offer, and soon after, Olmert imposed a blockade on Gaza, which Israel’s defense minister termed a form of “‘economic warfare’ that would generate a political crisis, leading to a popular uprising against Hamas.” With Egyptian cooperation, Israel then seized control of commerce in and out of Gaza, limiting even food imports and eliminating its fishing industry. Olmert advisor Dov Weisglass summed up this policy by saying the Israeli government was putting the Palestinians “on a diet.” According to the Red Cross, this blockade produced “chronic malnutrition,” especially among Gazan children.[1]
The Palestinians still refused to accept Israel’s terms, and the Olmert government decided to unilaterally extract the gas, something that, they believed, could only occur once Hamas had been displaced or disarmed. [dubious – discuss] As Moshe Ya’alon explained, “Hamas… has confirmed its capability to bomb Israel’s strategic gas and electricity installations… It is clear that, without an overall military operation to uproot Hamas control of Gaza, no drilling work can take place without the consent of the radical Islamic movement.”[1] Operation Cast Lead, launched in the winter of 2008, did not achieve the goal of “transferring the sovereignty of the gas fields to Israel.”[1][dubious – discuss]
In 2010-11, the Israeli government of Prime Minister Benjamin Netanyahu faced an energy crisis when the events of the Arab Spring in Egypt interrupted and then stopped 40% of Israel’s gas supplies. Rising energy prices contributed to some of the largest protests involving Jewish Israelis in decades.[1] Israel’s Resource Minister asserted that “[t]hese areas are within the economic waters of Israel… We will not hesitate to use our force and strength to protect not only the rule of law but the international maritime law.”[1]
The Iron Dome system, developed in part to stop Hezbollah rockets aimed at Israel’s northern gas fields, was put in place near the border with Gaza and was tested during Operation Returning Echo, the fourth Israeli military attempt to weaken Hamas and eliminate any Palestinian “capability to bomb Israel’s strategic gas and electricity installations.”[1]
The next round of negotiations stalled over the Palestinian rejection of Israel’s demand to control all fuel and revenues destined for Gaza and the West Bank. The new Palestinian Unity government then followed the lead of the Lebanese, Syrians, and Turkish Cypriots, and in late 2013 signed an “exploration concession” with Gazprom, the large Russian natural gas company. As with Lebanon and Syria, the Russian Navy was a potential deterrent to Israeli “interference.”[1]
With Gazprom’s move to develop the Palestinian-claimed gas deposits on the horizon, the Israelis launched their fifth military effort “to force Palestinian acquiescence,” Operation Protective Edge.[dubious – discuss] The operation “had two major hydrocarbon-related goals: to deter Palestinian-Russian plans and to finally eliminate the Gazan rocket systems.” The first goal was apparently met when Gazprom postponed its development deal. However, “the two-pronged land and air attack—despite unprecedented devastation in Gaza—failed to destroy Hamas’s rocket stockpiles or its tunnel-based assembly system; nor did the Iron Dome achieve the sort of near-perfect interception rate needed to protect proposed energy installations.”[1]
As of early 2015, Gaza’s natural gas was still underwater and the same for almost all of the Levantine gas.[1] In 2015, the Palestinian government resumed negotiations on the agreement with BG and abrogated the exclusive rights it had given to the company. It also raised the PIF share from 10% under the old agreement to 17.5%. Subsequently, Shell acquired BG on April 8, 2016.[5]
As of 2017, the Gaza Marine field licenses were owned by PIF with 17.5% of the field development rights, Consolidated Contractors Company owns 27.5% of these rights and Shell 55%.[5] The development and gas extraction rights belong to the Palestinians alone.[5]
The following article was first published by Global Research in January 2009 at the height of the Israeli bombing and invasion under Operation Cast Lead.
Global Research, “War and Natural Gas: The Israeli Invasion and Gaza’s Offshore Gas Fields”, Prof. M. Chossudovsky:
More than five years ago, Israel invaded Gaza under “Operation Cast Lead”.
In the wake of the invasion, Palestinian gas fields were de facto confiscated by Israel in derogation of international law
A year following “Operation Cast Lead”, Tel Aviv announced the discovery of the Leviathan natural gas field in the Eastern Mediterranean “off the coast of Israel.”
At the time the gas field was: “ … the most prominent field ever found in the sub-explored area of the Levantine Basin, which covers about 83,000 square kilometres of the eastern Mediterranean region.” (i)
Coupled with Tamar field, in the same location, discovered in 2009, the prospects are for an energy bonanza for Israel, for Houston, Texas based Noble Energy and partners Delek Drilling, Avner Oil Exploration and Ratio Oil Exploration. (See Felicity Arbuthnot, Israel: Gas, Oil and Trouble in the Levant, Global Research, December 30, 2013
The Gazan gas fields are part of the broader Levant assessment area.
What is now unfolding is the integration of these adjoining gas fields including those belonging to Palestine into the orbit of Israel. (see map below).
It should be noted that the entire Eastern Mediterranean coastline extending from Egypt’s Sinai to Syria constitutes an area encompassing large gas as well as oil reserves.
War and Natural Gas: The Israeli Invasion and Gaza’s Offshore Gas Fields
by Michel Chossudovsky
January 8, 2009
The December 2008 military invasion of the Gaza Strip by Israeli Forces bears a direct relation to the control and ownership of strategic offshore gas reserves.
This is a war of conquest. Discovered in 2000, there are extensive gas reserves off the Gaza coastline.
British Gas (BG Group) and its partner, the Athens based Consolidated Contractors International Company (CCC) owned by Lebanon’s Sabbagh and Koury families, were granted oil and gas exploration rights in a 25 year agreement signed in November 1999 with the Palestinian Authority.
The rights to the offshore gas field are respectively British Gas (60 percent); Consolidated Contractors (CCC) (30 percent); and the Investment Fund of the Palestinian Authority (10 percent). (Haaretz, October 21, 2007).
The PA-BG-CCC agreement includes field development and the construction of a gas pipeline.(Middle East Economic Digest, Jan 5, 2001).
The BG licence covers the entire Gazan offshore marine area, which is contiguous to several Israeli offshore gas facilities. (See Map below). It should be noted that 60 percent of the gas reserves along the Gaza-Israel coastline belong to Palestine.
The BG Group drilled two wells in 2000: Gaza Marine-1 and Gaza Marine-2. Reserves are estimated by British Gas to be of the order of 1.4 trillion cubic feet, valued at approximately 4 billion dollars. These are the figures made public by British Gas. The size of Palestine’s gas reserves could be much larger.
Who Owns the Gas Fields
The issue of sovereignty over Gaza’s gas fields is crucial. From a legal standpoint, the gas reserves belong to Palestine.
The death of Yasser Arafat, the election of the Hamas government and the ruin of the Palestinian Authority have enabled Israel to establish de facto control over Gaza’s offshore gas reserves.
British Gas (BG Group) has been dealing with the Tel Aviv government. In turn, the Hamas government has been bypassed in regards to exploration and development rights over the gas fields.
The election of Prime Minister Ariel Sharon in 2001 was a major turning point. Palestine’s sovereignty over the offshore gas fields was challenged in the Israeli Supreme Court. Sharon stated unequivocally that “Israel would never buy gas from Palestine” intimating that Gaza’s offshore gas reserves belong to Israel.
In 2003, Ariel Sharon, vetoed an initial deal, which would allow British Gas to supply Israel with natural gas from Gaza’s offshore wells. (The Independent, August 19, 2003)
The election victory of Hamas in 2006 was conducive to the demise of the Palestinian Authority, which became confined to the West Bank, under the proxy regime of Mahmoud Abbas.
In 2006, British Gas “was close to signing a deal to pump the gas to Egypt.” (Times, May, 23, 2007). According to reports, British Prime Minister Tony Blair intervened on behalf of Israel with a view to shunting the agreement with Egypt.
The following year, in May 2007, the Israeli Cabinet approved a proposal by Prime Minister Ehud Olmert “to buy gas from the Palestinian Authority.” The proposed contract was for $4 billion, with profits of the order of $2 billion of which one billion was to go the Palestinians.
Tel Aviv, however, had no intention on sharing the revenues with Palestine. An Israeli team of negotiators was set up by the Israeli Cabinet to thrash out a deal with the BG Group, bypassing both the Hamas government and the Palestinian Authority:
“Israeli defence authorities want the Palestinians to be paid in goods and services and insist that no money go to the Hamas-controlled Government.” (Ibid, emphasis added)
The objective was essentially to nullify the contract signed in 1999 between the BG Group and the Palestinian Authority under Yasser Arafat.
Under the proposed 2007 agreement with BG, Palestinian gas from Gaza’s offshore wells was to be channeled by an undersea pipeline to the Israeli seaport of Ashkelon, thereby transferring control over the sale of the natural gas to Israel.
The deal fell through. The negotiations were suspended:
“Mossad Chief Meir Dagan opposed the transaction on security grounds, that the proceeds would fund terror”. (Member of Knesset Gilad Erdan, Address to the Knesset on “The Intention of Deputy Prime Minister Ehud Olmert to Purchase Gas from the Palestinians When Payment Will Serve Hamas,” March 1, 2006, quoted in Lt. Gen. (ret.) Moshe Yaalon, Does the Prospective Purchase of British Gas from Gaza’s Coastal Waters Threaten Israel’s National Security? Jerusalem Center for Public Affairs, October 2007)
Israel’s intent was to foreclose the possibility that royalties be paid to the Palestinians. In December 2007, The BG Group withdrew from the negotiations with Israel and in January 2008 they closed their office in Israel.
Invasion Plan on The Drawing Board
The invasion plan of the Gaza Strip under “Operation Cast Lead” was set in motion in June 2008, according to Israeli military sources:
“Sources in the defense establishment said Defense Minister Ehud Barak instructed the Israel Defense Forces to prepare for the operation over six months ago [June or before June] , even as Israel was beginning to negotiate a ceasefire agreement with Hamas.”(Barak Ravid, Operation “Cast Lead”: Israeli Air Force strike followed months of planning, Haaretz, December 27, 2008)
That very same month, the Israeli authorities contacted British Gas, with a view to resuming crucial negotiations pertaining to the purchase of Gaza’s natural gas:
“Both Ministry of Finance director general Yarom Ariav and Ministry of National Infrastructures director general Hezi Kugler agreed to inform BG of Israel’s wish to renew the talks.
The sources added that BG has not yet officially responded to Israel’s request, but that company executives would probably come to Israel in a few weeks to hold talks with government officials.” (Globes online- Israel’s Business Arena, June 23, 2008)
The decision to speed up negotiations with British Gas (BG Group) coincided, chronologically, with the planning of the invasion of Gaza initiated in June. It would appear that Israel was anxious to reach an agreement with the BG Group prior to the invasion, which was already in an advanced planning stage.
Moreover, these negotiations with British Gas were conducted by the Ehud Olmert government with the knowledge that a military invasion was on the drawing board. In all likelihood, a new “post war” political-territorial arrangement for the Gaza strip was also being contemplated by the Israeli government.
In fact, negotiations between British Gas and Israeli officials were ongoing in October 2008, 2-3 months prior to the commencement of the bombings on December 27th.
In November 2008, the Israeli Ministry of Finance and the Ministry of National Infrastructures instructed Israel Electric Corporation (IEC) to enter into negotiations with British Gas, on the purchase of natural gas from the BG’s offshore concession in Gaza. (Globes, November 13, 2008)
“Ministry of Finance director general Yarom Ariav and Ministry of National Infrastructures director general Hezi Kugler wrote to IEC CEO Amos Lasker recently, informing him of the government’s decision to allow negotiations to go forward, in line with the framework proposal it approved earlier this year.
The IEC board, headed by chairman Moti Friedman, approved the principles of the framework proposal a few weeks ago. The talks with BG Group will begin once the board approves the exemption from a tender.” (Globes Nov. 13, 2008)
Gaza and Energy Geopolitics
The military occupation of Gaza is intent upon transferring the sovereignty of the gas fields to Israel in violation of international law.
What can we expect in the wake of the invasion?
What is the intent of Israel with regard to Palestine’s Natural Gas reserves?
A new territorial arrangement, with the stationing of Israeli and/or “peacekeeping” troops?
The militarization of the entire Gaza coastline, which is strategic for Israel?
The outright confiscation of Palestinian gas fields and the unilateral declaration of Israeli sovereignty over Gaza’s maritime areas?
If this were to occur, the Gaza gas fields would be integrated into Israel’s offshore installations, which are contiguous to those of the Gaza Strip. (See Map 1 above).
These various offshore installations are also linked up to Israel’s energy transport corridor, extending from the port of Eilat, which is an oil pipeline terminal, on the Red Sea to the seaport – pipeline terminal at Ashkelon, and northwards to Haifa, and eventually linking up through a proposed Israeli-Turkish pipeline with the Turkish port of Ceyhan.
Ceyhan is the terminal of the Baku, Tblisi Ceyhan Trans Caspian pipeline. “What is envisaged is to link the BTC pipeline to the Trans-Israel Eilat-Ashkelon pipeline, also known as Israel’s Tipline.” (See Michel Chossudovsky, The War on Lebanon and the Battle for Oil, Global Research, July 23, 2006)
