Gaza Marine: Is Israel-Palestine Conflict Caused by Offshore Gas Interests?

Some observers believe that the Israel-Palestine conflict was caused by offshore gas interests in Gaza, called the Gaza Marine

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Offshore natural gas resources can be found 36 kilometers off the coast of the Gaza Strip. Is there a connection between the Palestinian energy treasure and Tel Aviv’s stated intention to rule the region after the war?

In the Gaza Strip, Israel is still making progress on the ground. Benjamin Netanyahu, the prime minister, has stated time and time again that Tel Aviv will continue to rule the strip until it is demilitarized and deradicalized. Netanyahu also seems to be defying the signal from the Biden administration that Israel should hand over control of the Gaza Strip to the Palestinian Authority in the event that the Israel Defence Forces (IDF) beat Hamas.

Some commentators, however, contend that Tel Aviv’s ambition to oversee the area is really motivated by an unexplored resource known as Gaza Marines rather than the demilitarisation of the Gaza Strip.

What is Gaza Marine?

At a depth of 610 meters, Gaza Marine is a natural gas field situated 36 kilometers (22 mi) offshore the coast of the Gaza Strip. It is believed to contain 32 billion cubic meters of natural gas, and it is supplemented by a smaller field close to Israeli and Palestinian territorial seas that holds about three billion cubic meters of gas.

The field was discovered by British Gas (BG) in 1999 after the energy consortium was granted a 25-year license for the Gaza maritime territory by the Palestinian Authority (PA). This license provided the company not only with exploratory rights but also gave the right to develop any discovered fields and install necessary infrastructure. While BG took a 90% stake in the license, the other 10% was bought by the Consolidated Contractors Company (CCC), a Mideast construction giant.

But from the start, the project was enmeshed in controversy. According to American sociologist and author Michael Herman Schwartz, at the time, Tel Aviv demanded that Israel should be in charge of PA’s petrol income to ensure that they weren’t utilized “for terror.” The author concluded, “With this, the Oslo Accords were officially doomed.”

Famous Palestinian leader Yasser Arafat, meanwhile, praised Gaza Marine in September 2000, calling it “a gift from God” and asserting that it will “provide a solid foundation for our economy, for establishing an independent state with holy Jerusalem as its capital.” The Second Intifada broke out following the unsuccessful Camp David Summit between Israeli Prime Minister Ehud Barak, US President Bill Clinton, and PA chairman Arafat’s declaration was made at that time.

Palestinian leader Yasser Arafat

After around five years of fighting, Israeli Prime Minister Ariel Sharon and Palestinian Authority leader Mahmoud Abbas took significant moves towards de-escalation during the 2005 Sharm el-Sheikh Summit.

Mehmet Rakipoglu, a researcher at the London-based think tank Dimensions for Strategic Studies, claimed that Israel built an underground fortress under Gaza’s biggest hospital.

The Gaza Strip witnessed the Israeli military’s pullout in 2005, the ascent of Hamas’ political branch, and the PA’s Fatah’s expulsion from the area in 2007. Following Hamas’s takeover, Israel and Egypt imposed a blockade on the Gaza Strip that severely damaged its economy.

In December 2008, a new conflict rocked the strip, known as Operation Cast Lead or the Gaza Massacre, between Israel Defense Forces (IDF) and Hamas. Hostilities ended on January 18, 2009. However, Israel-Hamas clashes continued since then. All in all, since 2005, Hamas and Israel have fought five wars, with the most recent starting in October.

With Tel Aviv blocking development on the grounds that natural gas wealth would be exploited by Hamas and other Palestinian rebel organizations in their battle against Israel, Gaza Marine had remained unexplored and undeveloped throughout all those years.

Western Corps Lost Patience

BG closed its Tel Aviv office due to stalled negotiations with the Israeli government, Hamas’s occupation of the Gaza Strip, and the 2008 Gaza War. BG showed little interest in exploring the sector, although it retained its share in it.

A few years later, in 2015, negotiations to revoke the company’s exclusive rights were reopened by the Palestinian administration and BG. Following the agreements, Consolidated Contractors Company (CCC) held a 27.5% stake in the gas field rights, while the Palestinian side, represented by the Palestinian Investment Fund (PIF), received a 17.5% stake.

Shell acquired BG on April 8, 2016, acquiring a 55% share in the field. Shell’s decision to give up its participation in the project in 2018 and transfer ownership to Palestinian officials suggests that the company did not view it as promising, which would have required them to look for a new international contractor.

In order to advance the project, the PIF acquired a 27.5% stake, the CCC kept its equal portion, and an operating firm was given 45% so that the much-awaited exploration and extraction could begin. To develop the Gaza Marine field off the coast of the Gaza Strip, the PIF and CCC inked a contract with the Egyptian Natural Gas Holding Company (EGAS) in February 2021. The project’s stated goal was “to strengthen Palestinian national independence,” according to the parties’ memorandum of agreement (MOU), signed in February 2021.

The $1.4 billion gas exploration project in Gaza Marine is allegedly set to begin by the Palestinian Authority, Egypt, Israel, and Hamas, according to a report published in late November 2022 in the Washington Post. The article further stated that the project is expected to be completed by February 2023, but gas production might begin as early as March 2024.

The Benjamin Netanyahu administration was reportedly holding covert gas negotiations with the Palestinian Authority under US sponsorship, according to a May 2023 article in the Arab News. Israel formally approved the development of a gas field off the Gaza Strip in June, although they made it clear that security coordination with the Palestinian Authority and Egypt, a neighbor, would be necessary.

Why Israel-Hamas War Wasn’t Caused by Gas

Gas interests are not likely to be the catalyst for the current Israel-Hamas conflict in the Gaza Strip, according to international oil economist and global energy specialist Dr Mamdouh G. Salameh.

“The recent Hamas-Israel conflict has its origins in Britain’s Balfour Declaration of establishing a native home for Jews in Palestine and displacing its original and lawful people from their native home,” Salameh told Sputnik. “As far as I know, only gas reserves estimated at 35 billion cubic meters (bcm) have been discovered by British BG company offshore Gaza Strip.”

In fact, Israel currently possesses 11 large gas fields, the largest of which is Leviathan, believed to contain 623 billion cubic meters of gas. These include Tamar. Therefore, Gaza Marine’s proximity to the Gaza Strip makes no difference to Tel Aviv’s energy interests.

According to the expert, the fields that have already been found off the coast of the strip are large enough to support the economies of Gaza and the Palestinian territories, while not being as large as those that Israel has claimed.

“Were the Palestinian Authority to be permitted to explore for offshore oil and gas, it is very probable that it will discover sizable offshore gas and oil reserves like Egypt, Israel, and Cyprus. The value of these reserves once proven could sustain an independent Palestinian economy for years,” Salameh underscored.

Salameh says the stakes are actually far bigger. He suggested that “the Palestinian occupied territories might have a share in the future from the Eastern Mediterranean gas reserves estimated at 3.45 trillion cubic meters and 1.7 billion barrels of oil.”

Salameh was not alone in believing that an energy disagreement between Israel and the Palestinians was the catalyst for the current crisis; Konstantin Simonov, general director of the National Energy Security Fund, agreed.

“A popular conspiracy theory is that all this started because there are colossal hydrocarbon reserves there,” Simonov told Sputnik. “Firstly, the [Middle Eastern] region naturally triggers the concept that all events there should be viewed through the prism of hydrocarbons (…) But I think that here, after all, hydrocarbons are not of primary and fundamental importance.”

According to Simonov, the main reason BG decided against exploring the Gaza Marine was that the deposits were too difficult to yield substantial enough revenues.

“Even though BG did something there, it was actually not the largest discovery, not the largest deposit,” the expert explained. “And that is why, in fact, they did not undertake any real development there. Now, I repeat, all the most interesting projects are located in that part of the Byzantine basin that Israel considers its own and is already developing.”

The Russian academic is skeptical that in the near future, Palestinians will be able to assert their claim to further gas reserves discovered by Israel off the coast. It seems improbable that Israel and its Western allies will permit the Palestinian Authority to bring up the subject of defining the boundaries of the Eastern Mediterranean shelf regions since they are in a hurry to explore and exploit hydrocarbons from the Tamar, Leviathan, and Aphrodite fields.

In any case, unrelated to the energy conflict, the prolonged war in Gaza has thrown a kink into the Palestinian Authority’s desperately needed gas project, which could have aided in the recovery of the Palestinian economy and paved the way for the establishment of a two-state solution.

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