Daily Israel Report

Israel, PA Talking About Developing Gas Field Off Gaza

Israel has held talks with the PA over the development of a gas field off the coast of Gaza, says a report by the Israeli foreign ministry.
By Elad Benari
First Publish: 9/24/2012, 12:16 AM

Gas rig in the Mediterranean
Gas rig in the Mediterranean
Israel news photo: Flash 90

Israel has held new talks with the Palestinian Authority over the development of a gas field off the coast of Gaza, the Israeli foreign ministry said in a new report released on Sunday.

According to AFP, the report, prepared for submission to a New York gathering of donors to the Palestinian Authority, describes meetings and initial negotiations between the two sides on the thorny subject of the development of the Gaza Marine gas field.

"Development of the Gaza Marine gas field will generate revenues that could contribute dramatically to Palestinian fiscal sustainability," the report says.

"Following an approach by the Palestinian Authority, Israel confirmed its intention to engage in a meaningful discussion with the aim of developing the Gaza Marine gas field.

"In this context, official letters were submitted and meetings took place between Israeli representatives and the Palestinian leadership. These were followed by initial negotiations between the relevant parties regarding the development of the Gaza Marine gas field," says the report.

An Israeli official, who spoke to AFP on condition of anonymity, declined to specify when the meetings began or how advanced negotiations were, but he said Israel was eager to see work begin on the gas field.

“We're ready to move ahead on this. From our point of view this could be a big gain for the Palestinian Authority, and Israel's willing to move ahead on this quickly,” he said.

He added, “We have agreed on the principles, and now we can, from Israel's point of view, we are ready to move ahead very expeditiously with the process."

The report also gives no details when the meetings took place, or whether the discussions are ongoing, noted AFP.

It says that the gas project is one of several measures "to support PA economic stability."

Government officials told AFP that a proposal to issue a further 5,000 permits for PA building and farm laborers to work in Israel was expected to be approved by a ministerial committee late Sunday or on Monday morning.

The increase would bring the total number of PA Arabs currently allowed employment in the Jewish state to 46,450.

The development of the Gaza Marine field has been on hold for years, with Israel and the PA at odds over the project, despite international interest in exploiting the field.

The situation is additionally complicated by internal divisions within the PA, as the PA government headed by Chairman Mahmoud Abbas controls only the PA-assigned areas of Judea and Samaria, with Israel and much of the international community declining to engage with Gaza’s Hamas rulers.

AFP reported that the Palestinian Authority granted British Gas and the Consolidated Contractors Company group exploration rights in 1999, but Israeli objections and various disputes have held up development.

In 2007, British Gas ended negotiations with Israel on the sale of Gaza Marine gas to the Jewish state, and subsequently closed its office in Israel.  British Gas drilled two wells in the area in 2000, estimating resources at 1 trillion cubic feet.

Meanwhile on Sunday, the PA said it was ending restrictions limiting the number of traders who can import Israeli goods, in a bid to reduce spiraling prices.

"The system of exclusive agencies and exclusive distributors for goods and products manufactured in Israel or foreign goods imported through an Israeli agent is cancelled," economy minister Jawad Naji told a news conference.

"We will allow all interested traders to buy directly from the Israeli market without an intermediary, in compliance with the laws and mechanisms of the Palestinian Authority," he said in Ramallah.

He emphasized that the decision does not include the import of goods made in Jewish communities of Judea and Samaria, on which the PA has imposed a boycott.

The PA government currently faces its worst financial crisis since its 1994 establishment. The crisis has rendered the PA unable to pay employees their salaries or pay off debts it owes to private businesses.

The PA’s financial crisis prompted Prime Minister Binyamin Netanyahu to order the transfer of a 250 million shekel advance to the PA from tax revenues collected by Israel.