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Al-Ahram Weekly 15 - 21 June 2000 Issue No. 486 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 15 - 21 June 2000 Issue No. 486
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Travel Living Sports Profile People Time Out Chronicles Cartoons Letters Hot air
By Aziza Sami
Egypt has never actively sought to export natural gas to Israel, a government official insisted last week. And while ongoing negotiations are taking place, said the official, they are doing so at Israel's behest. Egypt, rather, is actively seeking markets for its gas reserves in Europe.
This flurry of clarifications over the long-vexed issue of gas exports came in response to the suggestion made recently in the Knesset that Israel halt gas export talks with Egypt.
It is no secret that Israel has actively been seeking to finalise a deal with Egypt since the 1996 MENA conference. Importing gas from Egypt would help Israel meet its rising domestic demand for this resource. A gas deal, too, could form the cornerstone of the drive for normalisation, since any pipeline would cross Palestinian territories, cross Israeli territory and might be continued, via Lebanon and Syria, to reach Turkey. The Egyptian government's oft-declared position, though, is that any deal must remain conditional on progress in the peace process, particularly along the Palestinian and Syrian tracks.
For those adept at reading between the lines and searching for the subtexts in which so many policy reorientations continue to be couched, Sameh Fahmi's statement, upon being appointed minister of petroleum in the new cabinet formed by Atef Ebeid, that Egypt had "no reservations" about exporting gas to any of its neighbours, was taken as an indication that there might be a softening in the official position. And a number of unilateral declarations by Israel over the past two years -- the Knesset statement being merely the latest -- have been consistent in the implication that a gas deal with Egypt is imminent.
Yet the fact remains that no memorandum of understanding, similar to that signed by Egypt and Turkey during the 1996 MENA conference, has been entered into by the two countries. This does not necessarily prevent international oil companies operating in Egypt -- BP-Amoco and the Italian oil company Eni -- from disposing of their own gas quotas as they wish, which may well include selling a portion to Israel. They would be legally free to do so under the terms of their contracts with the Egyptian government, terms that are by now well-established, though before contracting for any such sales to Israel, the companies themselves are likely to make a comprehensive assessment of the financial and political risks involved.
So is Egypt poised to begin exporting gas to Israel? Eli Suissa, Israel's minister of infrastructure visited Egypt at the beginning of the year. At the time, Israeli sources said that Cairo has "given the green light to international oil companies in Egypt to export gas to Israel." A seemingly clear-cut statement, which was undermined by a second statement made by Suissa to the effect that Israel had discovered its own natural gas reserves and might not need Egyptian exports after all. This "discovery" notwithstanding, Suissa's statements coincided with a non-too-subtle push by the US to conclude a gas deal, which culminated in US Secretary of Energy Bill Richardson visiting both Israel and Egypt again at the beginning of the year, in an attempt to persuade both parties of the benefits of concluding a deal. Richardson said that the US was "ready to assist with the funding of a pipeline exporting gas to Israel" adding that "if there is American participation, we will involve ( US overseas funding institutions)." The diplomatic implications, the claims and counter claims surrounding the deal, should not blind us to the fact that in the end the benefits that might accrue to Egypt if -- and it is an if -- any deal is concluded are far from clear cut.
Given that Egypt's estimated reserves of natural gas stand at 100 trillion cubic feet, many experts in the field argue that self-sufficiency should be the central aim of any strategy seeking to exploit the resource which is central to production and infrastructural development.
Israeli politicking over the "proposed" gas deal is obviously linked to Egypt's support for the Palestinians and Syrians in the peace process. Yet such politicking seems more a case of hot air than substance, intended primarily for media consumption. And the suggestion, made in the Knesset, that Egypt could be punished by Israel withdrawing from a deal that Egypt had never sought, the benefits of which are far from clear -- a deal too, that has never been made -- is patently ridiculous.
