Palestinians missing out on a £2bn energy fortune

Will Palestinians ever benefit from the gas field under Gaza?

Gaza could have been a ‘Dubai on the Mediterranean’ with its huge gas reserves if Hamas had not been frozen out of a deal

FIRST POSTED FEBRUARY 16, 2009

Wherever there is oil and gas to be found in the early 21st century, warfare is never far away. And as the smoke clears from Israel’s blitz of the Gaza Strip, and Hamas and Israel move towards a ceasefire, it is tempting to speculate whether Gaza is another "resource war", as the British government's former scientific advisor David King candidly described the Iraq invasion this week.

When Israel disengaged from Gaza in 2005, the pro-Israel columnist Thomas Friedman declared that its population had the opportunity to become a "Dubai on the Mediterranean".

In 1999 BG found £2bn worth of gas reserves off the coast of Gaza

At the time this aspiration appeared unlikely in a densely populated strip of land with few natural resources, whose connections to the outside world were severely circumscribed by Israel’s continued control over its borders.

But Friedman's hypothesis was not quite as fantastic as it seemed. In 1999 the BG Group (the multinational arm of British Gas) discovered huge deposits of gas off the coast of Gaza. They were valued at £2 billion.

Some 60 per cent of these reserves were located within the maritime waters controlled by the Palestine National Authority (PNA), while the remainder fell under Israeli jurisdiction. In theory these deposits provided sufficient to meet the energy requirements of Gaza and the West Bank combined, with large reserves left over for export.

To the Palestinians, these sensational discoveries offered a potential route to economic regeneration after decades of dependency on external aid. In 2000, Yasser Arafat negotiated a deal with BG which allowed gas to be sold directly to Israel, with 40 per cent of the revenues going to the Palestinians - made up of 10 per cent to the Palestine Investment Fund and another 30 per cent to an Athens-based Palestinian construction company.

Following the outbreak of the second Intifada in 2000, the Ariel Sharon government vetoed this arrangement, claiming that the gas revenues would be used to finance "terror attacks" on its citizens. These concerns may have concealed more selfish motives.

BG claimed that Israel was not willing to pay for the gas at market prices

Israel imports much of its gas, and the Gaza Marine Field would supply 10 per cent of its annual requirements, at considerably less cost. Though various proposals were made to ensure that any

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Without doubt international support should encourage this gas field to be used for the benefit of palestinians and any failure to do so smacks of support for Israel's ethnic war of extermination of palestinians in Gaza. Israel has much to answer for in its 60 year campaign of terror. Let us hope Obama is not as blinkered as Bush has been.

Posted by Peter at 11:25am on February 16, 2009

The Palestinians by all accounts have received more foreign aid than any other group in history. That aid (in the tens and tens of billions) has been squandered or stolen by successive generations of corrupt leadership. That the Hamas pleas to renegotiate the deal brokered by Arafat might have fallen on deaf Israeli ears is understandable. The Hamas leadership have been much more vocal and enthusiastic about their calls for the destruction and elimination of Israel. As for Gaza becoming another Dubai, recall that emirate is run and controlled by a privileged few. A Hamas political dynasty is hardly an example for the Palestinians to aspire.

Posted by Alex Harris at 2:07pm on February 16, 2009

The answer to the question "Will Palestinians ever benefit from gas reserves..." is No. If my close neighbor had a resource (say, jalapeno peppers) that I wanted and I go to her and say I will drive you into the sea if you don't hand them over, and then move away" and attempt it, she will push back at me and alert her neighbor and he will push back at me. His neighbor will see my irrational hatred that borders on delusional insanity and they will--rightly so--fight me. Now let's say that the Hebrew God--whether you believe it or forebear--is on my neighbor's side, and this God has declared that for His great name's sake He will save my neighbors from my irrational hatred, then you need to believe that I will eventually be utterly destroyed.

Posted by Carrie Boyer at 5:35pm on February 23, 2009

Will Palestinians ever benefit from the gas fields off Gaza? Sure they will when they become a legal entity in a two state solution, and stop rocketing Israel. Why is it that the Palestinians have rejected all peace offers from Israel, and agreements for a two country solution? Why is it that while Israel has the right of return, Saudi Arabia and the rest of the ardently Moslem countries haven't given shelter to the Palestinians? How is it that while Israel supplies a great deal of modern technolgy to the world, the Arab states have offerred none? So you are anti-Israel? Do you talk to your friends on the cell phone? Do you use Windows 2000, XP etc.? Well, if you do, you are using Israeli developed products.

Posted by John Valentine at 4:57pm on March 18, 2009