The $4 billion opportunity off the coast of Gaza

…In 1999, after paying the Palestinian Authority an undisclosed sum, BG, along with its partner, Consolidated Contractors Corporations, acquired the concession to survey for natural gas in 1,000 square kilometers of the Gaza Marine area.

In their agreement with BG, the PA stipulated that BG must pay it at least 10 percent of the royalties from any future sales of the gas, which the PA said would be placed directly into its Palestinian Investment Fund.


BG and CCC set about conducting seismic tests to determine if the field contained the valuable gas they had hoped for; in early 2000, BG confirmed that the field contained a large quantity.

Over the ensuring six and a half years, BG and officials from the Finance and National Infrastructures ministries tried to reach an agreement to pump the gas into Israel. But the two sides could not agree on the price.

Yet even before the talks broke off, the situation shifted dramatically in June 2007 when Hamas violently ousted Fatah from power in the Gaza Strip, claiming ownership of the gas fields off the coast and the proceeds from the sale of the gas.

This posed a serious problem for both Israel, which obviously was not going to pay a portion of the money to Hamas, and to BG, which was banned by its government from negotiating with Hamas. The Post reported that had Israel and BG reached an agreement on the sale price of the gas, they would have found an alternative arrangement for the transfer of funds to ensure they did not end up funding terrorism.

Today, the estimated $4 billion worth of gas off the Gazan coast is still sitting, untapped, at the bottom of the Gaza Marine gas field. Hamas has not backed away from it claim that it is the rightful owner of the gas, even saying it deserves more than the 10% of the royalties from the sale of the gas, as originally negotiated between BG and the PA.

Jerusalem Post