Israel, energy companies sign companion agreement to Lebanon border deal

TotalEnergies and Eni energy companies have signed an agreement on how to calculate Israel’s share income from the Kana-Sidon natural gas field.

 View of the Israeli Leviathan gas field gas processing rig near the Israeli city of Caesarea, on January 31, 2019.  (photo credit: MARC ISRAEL SELLEM/POOL)
View of the Israeli Leviathan gas field gas processing rig near the Israeli city of Caesarea, on January 31, 2019.
(photo credit: MARC ISRAEL SELLEM/POOL)

Israel and two European energy companies signed an agreement on how to calculate Jerusalem’s share of income from the Kana-Sidon natural gas field on Monday, a companion to the maritime boundary deal between Israel and Lebanon finalized last month.

The agreement will allow Lebanon, through its licensees, French energy company TotalEnergies and Italian ENI, to develop the Kana Reservoir and extract natural gas that may be there. The gas field was in an area of the Mediterranean Sea that Israel and Lebanon claimed as their own.

Israel conceded the entire disputed zone but, since part of Kana is still in its economic zone, it will receive about 17% of the value of the field once Total has done a thorough survey of how much gas is in the reservoir, which is expected to take over a year.

If the energy companies find gas, they will build an economic plan for developing the reservoir, after which they will sign a more detailed agreement with Jerusalem.

A MILITARY OBSERVATION tower overlooks the Mediterranean Sea and part of the maritime border with Lebanon, near Rosh Hanikra in northern Israel, in 2020. (credit: AMMAR AWAD/REUTERS)A MILITARY OBSERVATION tower overlooks the Mediterranean Sea and part of the maritime border with Lebanon, near Rosh Hanikra in northern Israel, in 2020. (credit: AMMAR AWAD/REUTERS)

The agreement “ensured Israel’s economic rights in the potential reservoir between the two countries,” Energy Ministry Director-General Lior Schillat said.

“The agreement in principle that we signed and the detailed agreement that will come later if natural gas is found in the reservoir will allow cross-border development between [Israel and] an enemy state, a unique event in the international energy market,”

Lior Schillat, Director-General of the Energy Ministry

“The agreement in principle that we signed – and the detailed agreement that will come later if natural gas is found in the reservoir – will allow cross-border development between [Israel and] an enemy state, a unique event in the international energy market,” he explained.

Will the formation of a new government affect the Lebanon deal?

Prime Minister-designate Benjamin Netanyahu expressed sharp opposition to the Lebanon maritime demarcation agreement shortly before it was set to be signed, calling it “terms of surrender.” In addition, many on the Right, as well as some in the outgoing government, spoke out against the signing of a significant agreement immediately before an election.

However, when the deal was finalized in late October, Netanyahu said that he will “behave as [he] did with the Oslo Accords.” When he became prime minister in 1996, Netanyahu fulfilled the previous government’s commitment that Israel would mostly withdraw from Hebron, following negotiations in which he demanded that the Palestinians pledge to stop terrorism.

US President Joe Biden provided Prime Minister Yair Lapid with a letter of guarantees that would likely limit Netanyahu’s ability to change the deal. The letter, which backs up the Lebanon agreement, states that the US is committed to supporting the IDF and strengthening its ability to defend Israel, including against threats to its ships and energy assets.