War and Natural Gas: The Israeli Invasion and
Gaza's Offshore Gas Fields
by Michel Chossudovsky - GlobalResearch.ca
January 8, 2009
The 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.
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
billion, with profits of the order of 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
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.(BG
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
What can we expect in the wake of the invasion?
What is the intent of Israel with regard to Palestine's Natural Gas
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
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,
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