War in Gaza = War Over Natural Gas?

Israel v. Palestine: Yet Another Gas War?

We extensively documented that the wars in the Middle East and North Africa are largely about oil and gas.  (Update: Iran has just started building its gas pipeline to Syria.)

As Professor Michel Chossudovsky noted in 2009, gas may be a central reason for the war over Gaza as well:

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.

Map 1

Map 2

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.(BG website).

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.


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)

Map 3

Is Middle Eastern politics boiling down – yet again – to oil and gas?

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  • asaxon

    So let me get this straight–231 rockets launched from Gaza hit Israel in 2010, 630 hit Isrel in 2011, and over 1400 to-date in 2012. Since Israel’s withdrawal from Gaza in 2005, over 8000 rockets from Gaza. And yet, in your mind, Israel’s current military response is just a greedy ploy to get its hands on a natural gas field. You’ve stopped taking your meds, haven’t you?

    • zlato

      I’m just curious, whats your take on the Zionist entity stealing Lebanon’s natural gas resources in the south? Did you know they are violating many international laws going into Lebanese waters to extract natural gas?
      On another note, let me get this straight, the Zionist entity has: Occupied a country, oppressed its people, taken their territory, and displaced their population to neighboring countries. Yet in your mind they cannot resist and send a few short ranged rockets into THEIR original territories to fight back? They cannot kill you, but you can kill them and trap them between walls and undermine their humanity regularly, right? These men will rather die on their feet than live on their knees.

      • asaxon

        All I needed to hear is “Zionist entity”. My take is that the Jewish people have a legitimate claim to Eretz Yisrael as their eternal homeland. They were there long before the Arabs, and have maintained a continuous presence there for 2000 years. The Israeli Arabs are full citizens of a the only democracy in the mid east.

        As for the natural gas dispute, my take on that is that Israel made the find within its territorial exclusive economic zone. To the extent that the actual deposit extends up the coast (if at all), then considering that Lebanon is technically in a state of war with Israel (Lebanese Prime Minister Fouad Siniora said that Lebanon would be the “last Arab country to make peace with Israel”), I don’t think Israel has any obligation to negotiate the fine details of who is entitled to what. It’s first come, first serve.

        “These men will rather die on their feet than live on their knees.”? Then so be it, and I will shed no tears for them. But, unlike them, I will morn the Arab innocents who die, as Hamas uses them as human shields.

        • kagan

          Your big talent is creating “antisemitism”.
          May hashem keep pissing in your cornflakes.

        • rpdiplock

          Israel a democracy … stop pulling yourself, Johnny two-dicks. Nobody could get so silly, only playing with one.

    • rpdiplock

      Whose research are you ‘quoting’ your statistics from … MOSSADS, obviously? Besides, the Israelis are experts at conducting black-ops sorties to inflame a situation for personal gain … therefore, is there any incontrovertable proof that it is the Palestinians who have been firing the firecracker-rockets? I guess not. So, take your distorted statistical numbers and shove ’em up you know where.

  • charlieprimero

    Look at history. Israel always lights up Gaza a few months before an election to scare voters.

  • Jeff Simpson

    Why you calling it a “war”? It’s a F-ing Massacre

  • Rabbit
  • Eric B.

    And now the kickoff.

  • Yuri Volchenko

    George Washington… how stupid can a blogger be? Obviously, Israel doesn’t want the Hamas government to be paid in cash. Hamas is dedicated to destroying the State of Israel. Any cash they get is going to be immediately used to buy rockets and other weapons. These will be used in multiple attempts, successful and unsuccessful, as always, to kill Israelis. So, if Hamas is paid for Palestine’s gas, it must be in goods and services so that the money cannot be diverted to weaponry.