Middle East Eye: Israeli Gas Deals Create Strange Bedfellows

The monopoly held by Nobel Energy and Delek on Israel’s natural gas resources became virtually unassailable this week, as the resignation of local anti-trust chief David Gilo was swiftly followed by Finance Minister Moshe Kachlon absolving himself from dealing with the monopoly because of a close friendship with one of its stakeholders.

Breaking up Delek and Nobel’s monopoly was a key election promise of Kahlon, who built much of his recent political career on successfully breaking up a similar monopoly over the Israeli cellular communications market. But on Tuesday Kachlon announced he will hand the gas portfolio back to Prime Minister Benjamin Netanyahu, a strong backer of the monopoly who has clashed repeatedly with the now former regulator.

Israel’s recently tapped natural gas resources are set to become a crucial part of the Israeli economy in the coming years, boosting its GDP and casting many aspects of its foreign policy in a new light - from an East Mediterranean alliance with Cyprus and Greece, to new gas agreements with Egypt and Jordan. The gas discoveries also look set to affect Israel’s foreign and military policy, especially with regard to Lebanon, which is contesting Israel’s ownership of the northernmost gas field, Tamar 1.

The Israeli navy is set to be deployed to protect gas rigs, and the Israeli media has speculated frequently the rigs will make an appealing target for Hezbollah or other paramilitary organisations. MORE