The Greek-owned hydrocarbon company Energean favours the necessity of transnational regional cooperation within the framework of the Eastern Mediterranean Gas Forum (EMGF), which includes Cyprus, Greece, Egypt and Israel, without excluding the future participation of Lebanon, given the recent maritime delimitation agreement reached with Israel.
"It is an oddity that Israeli gas remains at the bottom of the sea and that Israel risks missing a unique opportunity to exploit it, especially now that Europe is in dire need of it. The exploitation of Israeli gas will be possible with government support and by developing a framework for cooperation at the regional level," Energean's director of Energean's offices in Israel, Saul Chemach, among others, stressed in an interview in last Friday's edition of the Israeli financial newspaper Globes.
While the final composition of the new Israeli government is expected to be announced, with the Energy Ministry reportedly coming under the control of Likud, the party of Benjamin Netanyahu, Chemach, who served as director general of that ministry a decade ago, points out that Israel should not rest on its laurels after the start of gas extraction from the Karis field, which occurred three weeks ago. "The new government in Israel will need to develop a long-term plan that balances meeting the needs of the domestic Israeli market and the need to export the gas to international markets," Chemach clarifies.
"It is necessary to take steps at the regional level and create the necessary infrastructure to bring gas to Europe," says Chemach, referring to the necessity of adopting a logic within the framework of a "common gas market" at the regional level.
"There will need to be closer cooperation between the countries participating in the Eastern Mediterranean Gas Forum (EMGF)", namely Israel, Greece, Cyprus, Egypt "as well as with Lebanon, which is expected to become a member of the EMGF after the signing of the agreement with Israel", the Energean official explained.
Saul Chemah added that "the countries of the region, in cooperation with hydrocarbon companies, should coordinate to design infrastructure in order to transport the gas to Europe from liquefaction substations in Egypt and with a pipeline network via Cyprus or Israel." Chemach said that "the creation of a pipeline network starting from Israel presents difficulties, mainly due to objections expressed by environmental organisations and other bureaucratic difficulties."
Saul Chemach mentioned in his interview the necessity of transnational cooperation. "If each country goes ahead with its own measures, we will get nowhere. Such an eventuality will not only not prove beneficial, but will only delay the advancement of the economic interests of all countries in the region without exception," the director of Energean's offices in Israel clarified, adding that "the discovery and exploitation of natural gas in the Israeli EEZ is not the company's sole interest. It is in the interest of all countries in the region, without exception, to strengthen the energy self-sufficiency of the Israeli market, and at the same time to meet the energy needs of Europe. It is a common interest. Action simply has to be taken. Political crises do not last indefinitely. On the contrary, crises in themselves create opportunities, provided they are properly exploited.
Asked by Globes if there was any truth to the rumors that Energean was under political pressure from Israel and third countries to delay gas extraction from the Karis field until the Israel-Lebanon agreement was signed, Saul Chemach said that "the company responded to the instructions indicated exclusively by the Israeli Ministry of Energy."
However, the newspaper commented that, according to its own information, Energean was under pressure to delay mining from business and political figures in France and the US until the successful conclusion of the negotiating effort by US mediator Amos Hochstein. This information was not confirmed by Chemach's words. However, he claimed that the company did not feel particularly pressured by the threats issued by Hezbollah while the Israel-Lebanon negotiations were in their final stage.
"I myself was on our platform, both before mining began and on the first day of gas extraction from Karis," Chemah said, adding that Energean was not concerned "because we are convinced that Israel is able to protect its natural resources that are of critical strategic importance. We are in close and full cooperation with the relevant military authorities, in whom we have full confidence."
Doubling tax revenues for the Israeli Treasury by the end of 2022
According to figures cited by the Israeli financial daily Globes, the Israeli Treasury's revenues from taxes on hydrocarbon companies operating in the country's EEZ amounted to $650 million in the first half of this year.
It is estimated that since the start of gas extraction from Karis three weeks ago and until the end of 2022, the revenue the Israeli Treasury will gain from company taxes will amount to $1.4 billion. As Globes comments, the forthcoming gains for the Israeli State are found to be much higher than those initially estimated by the Bank of Israel - amounts that are expected to increase even more in the near future.
However, as the newspaper's analysts assess, the current situation, despite its optimistic picture, poses the following risk: Qualifying the economic benefits that will result from the export of Israeli gas, it is not unlikely that there will be a shortage of gas on the domestic Israeli market, which will have to be covered by more expensive imports, inevitably creating an oxymoronic situation.
Commenting on this assessment, the Israeli Ministry of Energy replied to Globes editors that "bureaucratic procedures have begun for the fourth round of the competitiveness tender, which will be announced in the coming period, precisely because the effects of the international energy crisis, the increase in demand from Europe and the increased needs of the domestic Israeli market are already becoming apparent."
Greek-owned hydrocarbon company Energean recently announced that it is extremely optimistic about the performance of its new Athena, Zeus, Hermes and Tanin fields, located near the Karis field within the Israeli EEZ, having already set timelines for their development within 2023. However, in order to implement the relevant business plans, the smooth functioning of the public sector is also necessary, which will be managed by the new government when it is formed and takes office.
Source: CNA
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