The Shark rig began producing natural gas on Wednesday, a day before the government approved the maritime boundary agreement. According to the outline, Israel and Lebanon agreed that the border of the economic waters would be in accordance with the original Lebanese demand, line 23 – and thus 860 square kilometers are transferred to Lebanese control. Among them, the Sidon-Kana gas field.
Route 23 crosses the Sidon-Kana field in the south, leaving a smaller area in Israel’s economic waters. According to the agreement, Lebanon will manage the production in Sidon-Kenna through the French company Total and its partner, the Italian company Eni. Israel is expected to receive compensation for royalties from the remaining portion, approximately 17%, as part of an agreement to be signed with Total.
A senior official of the energy companies involved in the maritime agreement tells Globes that according to the estimates and data analysis of the geological survey in the Sidon-Kana reservoir, the field will be productive and profitable – and close to 100 BCM (a billion cubic meters) can be produced from it. That is, almost twice as much as a shark, with revenues of hundreds of billions of dollars. If the revenues materialize, Israel will demand about 17% of the revenues – after apparently giving up three times as much revenue as part of the agreement. “Without this analysis, the companies, in particular Total, would not have pushed for an agreement that allows the start of exploration drilling,” the official noted.
So far, the maritime border agreement has not been brought before the ministers, because there is none yet. As part of the discussions between the representatives of Israel, the Ministry of Energy, the Tax Authority and the Accountant General, and Total, several disputes arose that are far from being resolved – and at the center of them is the method of calculating the royalties that Jerusalem will receive. Lebanon is not a party to this negotiation, but its decision on how to collect tax on the profits will directly affect the scope of compensation to Israel. The second dispute is over the mechanism for calculating Israel’s partiality in the field and its products. Without an agreement between Israel and Total, the Sidon-Kana production process cannot begin.
“The agreement is good for Lebanon, but also good for Hezbollah,” a Lebanese political official who opposes the Shiite terrorist organization tells Globes. “Hezbollah is marketing the agreement as an Israeli and American surrender to the dictates it placed on them.” And here comes the political twist. It seems that many parties joined in bringing it to the approval of the controversial agreement, including the legal advice to the government and the senior officials of the defense establishment who preferred to avoid dealing with the reasons against the agreement.
Alharer: “The development of Marin was postponed due to the elections”
Egyptian Foreign Minister Sameh Shukri confirmed on Wednesday the publication in Globes on October 19 about the progress with the Palestinian Authority for the development of the Marin gas field, which is located off the coast of the Gaza Strip.
According to Shukri, there is already a framework agreement with all the countries involved, including Israel, and he expects that there will be progress in the coming months. Minister Karin Elharer confirmed to Globes that there had been talks on the matter. “Following an agreement between Egypt and the Palestinian Authority, a request came six months ago to promote the development of the Marin gas reservoir,” said her office. “Already in July, the Minister of Energy decided, and this in light of the announcement of elections, that the decision on advancing the issue to the next government should be waited for.”
If so, why didn’t they decide to postpone the agreement with Lebanon as well? A senior political official tells Globes that in the case of Lebanon we are talking about talks that started at the beginning of the year, but he also admits that the breakthrough – the Israeli agreement to Line 23 – only happened at the end of August. That is, after the announcement of the elections.
Israeli companies go to an exhibition in Bahrain
About ten Israeli defense companies and companies from the aviation sector – including the three largest Israel Aerospace Industries, Elbit and Rafael – will participate in about ten days, for the first time, in the air show that will be held in Bahrain. This is an exhibition that is considered one of the most important events in the field of global aviation, and will be attended by some of the largest companies in the world – including aircraft manufacturers such as Boeing.
The Aerospace Industry will present at the exhibition products for civil aviation, radars, air defense systems, coastal defense and defense systems using drones. At the same time, Elbit will promote at the exhibition the sale of multidimensional network warfare systems, precision air weaponry, head systems for pilots, as well as aircraft protection systems – including DIRCM and Spectro that protect military and civilian aircraft against shoulder-fired missile threats. “This is an opportunity for Israeli companies to be exposed to international buyers and huge companies and to present their products,” says Mati Weinberg, CEO of ISDEF from the Avnon Group – the company that prepares the Israeli pavilion. According to him, the expectation is that the pavilion will arouse great interest due to the good name of Israeli products.
Globes has learned that a visit to the Israeli pavilion by Saudi owners from government offices and companies is expected, as part of what will be another step in the warming of economic relations between Riyadh and Jerusalem. The Saudis are interested in both defense and civilian aviation products.
Another layer in the economic relations between Israel and the Kingdom takes place in Saudi Arabia itself. About ten Israeli companies entered the huge Saudi project of building the future city of Niom. According to Eleanor Bacher of the Blue Laurel company, which links businessmen from Israel and the Gulf countries, these are companies from fields such as agrotech, renewable energy and security.
The issue of Israel-Saudi Arabia relations is somewhat related to Riyadh-Washington relations, which have come to a standstill, due to OPEC’s decision to reduce the scope of oil production. According to an Israeli source, at this stage the Saudis have not prevented progress with Israeli companies. However, if tensions escalate, this may also damage the relationship between Saudi Arabia and Israeli companies.