Lebanese-Israeli maritime demarcation: A win-win deal

A historic agreement has been reached between Lebanon and Israel over the disputed maritime borders, which is seen as a positive step for both sides for exploiting natural gas, albeit under US/European pressure.

The Lebanese presidency and Israeli cabinet announced that the two countries reached a permanent agreement over a final US-brokered draft establishing a maritime boundary line in the exclusive economic zone (EZZ) in the eastern Mediterranean, putting an end to a dispute over rights to extracting natural gas from the Karish field.

“The final draft is satisfactory for Lebanon and meets its needs and preserves its natural reserves,” said the Lebanese presidency in a statement, voicing hope of declaring the final agreement sooner.

“Lebanon obtained its demands because they are its rights,” said Lebanese negotiator Ilias Bou Saab, who handed over the final draft of the agreement to President Michel Aoun. He added that President Aoun started issuing decrees regarding the oil.

On the other side, Israeli caretaker Prime Minister Yair Lapid described the deal as a “historic achievement,” while several world leaders welcomed the move.

The final version of the agreement was not objected to by Israel’s foe, Hezbollah. Secretary-General Hassan Nasrallah announced in his speech on Tuesday that the movement stands by the Lebanese government regarding the new deal.

“What we care about is when the Lebanese officials of the Lebanese state say that this agreement meets the official demands of the Lebanese state; then it is okay for us. We have no problem. What we care about is extracting oil and gas from the Lebanese fields.”

Beirut and Tel Aviv were at a loggerhead over winning concession of gas extraction in Karish field, which falls at Line 29 [or Block 9] in the eastern Mediterranean. In January, Lebanon declared in a letter to the United Nations that it has the right to the maritime border from Line 23 to Line 29, with an area of 2,290 square kilometers (860 square km plus 1,430 square km after Lebanon’s declaration of its right to it). Ten months later, both sides started indirect talks with US brokerage and UN supervision.

As a result, French company Total Energies suspended its gas exploration for Lebanon in the field at that time until reaching a final agreement on the delineation of borders, Lebanese newspaper Al Markazia reported on January 9. However, the French oil company would resume its operation in the field after reaching this agreement.

Meanwhile, Israeli-assigned Energean PLC, after getting approval from the Israeli Ministry of Energy, confirmed it would start certain testing procedures and start the flow of gas from onshore to its floating production storage and offloading (FPSO) vessel, which has been anchored in Israeli waters since June 6.

Lebanese officials told Al Diyar newspaper that a meeting would convene in Naqoura, where US mediator Amos Hochstein will get two separate versions of the deal signed by the two parties and then to be sent the United Nations.

Why was the deal reached now?

Lebanese political analyst Kassim Kassir told Jusoor Post that the United States put pressure on Israel to reach this agreement, in addition to other pressure from EU countries like France. “They pushed Israel to accept the conditions of the deal and give concessions on disputed areas,” he said, noting that the energy crisis in Europe due to the ongoing Russian-Ukrainian war forced Israel to finalize the deal to export gas to Europe.

“Israel made concessions because it needs to strategically get benefits. Europe [also] is in need of the gas and doesn’t want war in the region,” he continued, noting that Hezbollah had power on the ground when it threatened to launch a war if Israel unilaterally started extracting oil in the Karish field.

The political expert added that Lebanon has preserved its rights and did not give up Line 29.

In mid-June, Egypt, Israel and Europe signed a deal per which Israel would increase gas sales to Europe via Egypt after being liquefied at the latter’s liquefaction plants. Some European countries already headed to exporters in the Middle East like Israel after suspending Russian oil imports.

Exporting the Israeli gas would bring in billions of dollars, as Israeli Prime Minister Lapid indicated when he announced Israeli’s acceptance of the final draft. “This is a historic achievement that will strengthen Israel’s security, bring in billions, and promise stability along the northern border,” he said. 

‘Positive message’ 

The explored gas in this disputed area would tremendously solve Lebanon’s electricity problem that forced the electricity station to shut down after running out of fuel in October 2021.

“The new deal forms a positive message [...] and would convince some countries and politicians to help Lebanon ease its economic and financial crises and to directly and quickly get money,” said Kassir.

In response to Jusoor Post’s question about to what extent this deal will positively be reflected on the file of exporting the Egyptian gas to Lebanon trough Jordan and Syria, as Cairo is still waiting for US guarantees that exporting gas to Lebanon would not be subjected to the US Caesar Act sanctions against Syria, Kassir said that it could be positive and make the US lift its objection.

In September last year, Egypt, Jordan, Syria and Lebanon agreed to deliver the Egyptian natural gas to the Lebanese through Jordanian and Syrian pipelines (aka Arab Gas Pipeline). In September 2022, Lebanese Energy Minister Walid Fayyad told Egyptian newspaper Al-Masry Al-Youm that the gas deal between Egypt and Lebanon has been stalled due the Caesar Act on Syria and new terms set by the World Bank, which would fund exporting the Egyptian gas to Lebanon.

“The agreement [of maritime demarcation] was reached, and all the parties welcomed it. We have to wait for the following practical steps that lead to signing it, and this takes time,” Kassir said.