What does Israel want? The Israeli Invasion and Gaza’s Offshore 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, the ruin of the Palestinian
Authority and the December 2008 military invasion of the Gaza Strip by Israeli Forces have enabled Israel to establish de facto control over Gaza’s offshore gas reserves.
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).

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 PA-BG-CCC agreement includes field development and the construction of a gas pipeline.(Middle East Economic Digest, Jan 5, 2001).

The BG Group drilled two wells in 2000:

• Gaza Marine-1
• 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 of Gaza Offshore.

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).

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)

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.

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)

British Petroleum (BP)

British Petroleum is the third largest publicly traded energy company in the world and the fourth largest company overall in terms of revenue. In 2010, BP had revenues of $308 billion and claimed total assets of $272 billion. BP employs over 79,000 people worldwide and is headquartered in London, England but has additional headquarters in Houston, Texas.

• Founded : 1909 (as Anglo-Persian Oil Company)
• 1935 (as Anglo-Iranian Oil Company)
• 1954 (as British Petroleum)
• 1998 (as BP Amoco plc)
• 2001 (as BP plc)
• Headquarter : London, UK
• Key people : Carl-Henric Svanberg (Chairman)

History: 

BP can date its history back to 1901 when the Shah of Iran granted William Knox D’Arcy a concession to search for oil. In 1909 the Anglo Persian Oil Company was incorporated as a subsidiary of Burma Oil Company and went on to exploit oil rights in the Middle East. In 1935 the company became known as the Anglo Iranian Oil Company, a name that it retained until 1953.

In 1951, the prime minister of Iran was assassinated and replaced by a nationalist named Mohammed Mossadeq who nationalized oil production under the National Iranian Oil Company. In 1953, the United States CIA organized a coup to remove Mossadeq. As a result of the coup, the National Iranian Oil Company became an international consortium. Profits were split on a 50/50 basis with Iran, but oil reserves were split among the consortium. 40% went to five American companies, 20% to Royal Dutch Shell and Total S.A., and 40% to the AIOC. In 1954, the AIOC became the British Petroleum Company.

In 1998 British Petroleum merged with Amoco to become BP Amoco. The company was formally renamed BP in 2001 and adopted the tagline “Beyond Petroleum.”

Holdings and Industry Segment:

 BP operates upstream and downstream affiliates and also owns the Castrol brand of automotive lubricants. BP has roughly 18 billion barrels of oil in proven reserves. It produces around 3.8 billion barrels of oil per day.

BP has major holdings in renewable energy including solar, hydrogen biofuel, and wind. The company currently invests of $1 billion per year in renewable energy research.

Revenue:

BP posted revenue of 308 billion USD in 2010 along with operating losses of 3.7 billion U.S. dollars and net income loss of 3.3 billion USD. These losses are a result of the Deep water Horizon well explosion that occurred in the summer of 2010. The year prior to the accident, BP posted a profit of $17 billion.

As a result of the 2010 Deepwater Horizon well explosion, BP agreed to set up a $20 billion fund in order to compensate citizens of Gulf States for the damage caused. The monetary size on the fund is neither a ceiling or a floor, leaving BP own to litigation in the future, but also requiring the company to release the entire amount of the fund.