In 2019, UNCTAD (the United Nations Conference on Trade and Development) reported that the occupied territories lie above sizeable reservoirs of oil and natural gas wealth in Area C of the occupied West Bank and off the Gaza Strip. However, as UNCTAD warned, the Israeli occupation has prevented Palestinians from developing their energy fields.
The missed opportunities added up.
Palestinians’ ransacked energy wealth
Based on the 2010 US Geological survey, the discoveries of oil and natural gas in the Levant Basin amounted to 122 trillion cubic feet of natural gas and 1.7 billion barrels of recoverable oil. In 2023 US dollars, the value of these resources translated to $557 billion and $87 billion, respectively. At the eve of October 7, that was about $644 billion in total.
By 2018, 18 years had passed since the drilling of Marine 1 and Marine 2 offshore Gaza. As the Palestinian Authority had not been able to exploit these fields, the accumulated losses were already in billions of dollars. Even in the West, the Israeli stance was seen as needlessly harsh.
In February 2021, amid the covid-19 fog of the pandemic years, talks on a gas pipeline that would deliver reliable energy to the impoverished Gaza seemed to move ahead. The plan would see natural gas from the deepwater Leviathan field operated by Chevron in the eastern Mediterranean flow through an existing pipeline into Israel, and from there into Gaza through a proposed new extension. The Israeli side of the planned pipeline would be funded by Qatar and the section in Gaza paid for by the European Union.
After a painful seven-year pause, the pipeline project was expected to provide “a steady energy source to Gaza, ending rolling blackouts that have helped cripple the economy of the blockaded Palestinian enclave.” Control over these energy resources was a central element in Yasser Arafat’s state-building agenda. As Michael Barron, an energy consultant who has written on Gaza’s energy concurs, “Israeli exploitation of Palestinian resources was and remains a central part of the conflict.”
But the Netanyahu cabinets’ intransigence is working against Israel’s long-term interest in peace and stability. In particular, the recognition of the Palestinian state, especially by countries like the UK and Italy with large energy firms registered in their jurisdiction (BG and ENI, respectively), could clarify the legal ambiguity. It could ensure the Palestinian Authority with a secure source of income that is no longer reliant on Israel.
But that has never been acceptable to the Netanyahu cabinets.
Illegal offshore tenders amid huge onshore destruction
In December 2022, Israeli Ministry of Energy launched the Fourth Offshore Bid Round offering new exploration licenses. A year later, it awarded licenses to several Israeli and international companies: Eni (Italy), Dana Petroleum (UK, a subsidiary of a South Korean company), and Ratio Petroleum (Israel). The problem is that these tenders violated international law, however.
Nonetheless, just a few months later in June 2023, following years of stalled talks, Israel approved the development of the Gaza Marine field, while Egypt’s state-owned EGAS (Egyptian Natural Gas Holding Company) was to lead extraction efforts in cooperation with the Palestinian Authority. Nonetheless, Israel stipulated that Hamas must not benefit financially.
Ironically, PM Netanyahu had for years ensured, as part of his Gaza strategy, that Hamas can receive multi-million-dollar shipments, via intermediation. The double-faced ploy used Hamas to disrupt the Palestinian Authority (PA), to keep Gaza weak and ultimately to reap the gas benefits to Israel.
As a net effect, active gas exploration or production could not commence due to the ongoing tensions in and around the Strip, which undermined investment and infrastructure development. The resulting stalemate status quo harmed Egypt’s mediation and interest in fostering regional energy stability.
As Israel initiated its ground assault in Gaza a week after October 7, 2023, Energy Minister Israel Katz pledged on X that “all the civilian population in Aza [Gaza’s Hebraized name] is ordered to leave immediately. We will win. They will not receive a drop of water or a single battery until they leave the world.”
But Netanyahu’s veteran Likud ally had another, equally destructive role. It was Katz’s Ministry that awarded the exploration licenses to the companies on October 29, 2023, violating international law – just two days after the lethal fury of the full-scale invasion in Gaza of the Israeli military. If it wasn’t pre-planned, it was certainly most convenient.
Hellbound and Down 