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Sethuraman Nadarajan
20 November 2022 |
The deal benefits Israel territorially, economically, and offshore energy exploration.
Explained: Israel-Lebanon Maritime Border Deal
What is the deal about?
On 27 October, Lebanon’s President Michel Aoun in Beirut and Israel’s Prime Minister Yair Lapid in Jerusalem signed a US-brokered maritime border deal. It provided Israel and Lebanon to explore offshore energy in the disputed region. The maritime agreement was mediated by US Envoy and Coordinator for International Energy Affairs Amos J Hochstein. The deal helped redraw the disputed maritime border (854.6 sq. km) shared between Lebanon and Israel for the first time. The border Line 23, shares the Qana gas field and narrows down the area of Block 9 (1742 sq. km) that belongs to Lebanon. Under the terms of the agreement, Israel will retain all rights to the development of the Karish field. While Lebanon will benefit from the rights to Qana under the condition of Israel, for example, the French company Total, which plans to explore gas fields, must enter into financial agreements with Israel without prior approval from Beirut. Essentially, the deal would allow Israel to monopolize the Kalish oil fields, but Lebanon would have to share 17 per cent of Qana's revenue with Total and get Israeli approval.
What do the leaders have to say about the deal?
US President Joe Biden said: “… it will secure the interests of both Israel and Lebanon, and it sets the stage for a more stable and prosperous region.” Lapid said that it is not every day that an enemy state recognizes the state of Israel in a written agreement. Lapid added that the deal was an economic achievement. Lebanon’s President Michel Aoun said that the deal is an international deal and not a bilateral treaty made with Israel, with no political dimensions or impacts that contradict Lebanon’s foreign policy. Aoun added that Lebanon did not give up a single square kilometre to Israel. Hezbollah leader Hassan Nasrallah said in a press conference that all the exceptional, special measures and mobilization carried out by the resistance for several months are now declared over.
What is the background?
Israel and Lebanon have been at war since the mid-1950s. In 2010 Israel discovered the Leviathan gas fields. Lebanon’s devastating economic collapse and corrupt political elites require new revenue streams to support national debts per capita. Lebanon submitted a border claim to the UN in 2011. It argued that the borderline should be marked further 854.6 sq km along the land border. A portion of the Karish gas field, which was in the undisputed territory of Israel,Gas company Energean on behalf of Israel, began development for extraction in 2017, but the COVID-19 pandemic has delayed work. At the time, Lebanon claimed that the entire Karish oil field was part of the country’s exclusive economic zone.
On 29 June 2022, Israel was exploring the areas for gas in the Karish gas field when Israeli forces downed a Hezbollah drone flying over the Mediterranean in Lebanon’s exclusive economic zone. On 02 July 2022, Israel shot down three Hezbollah drones from Lebanon directed toward the Karish gas field. Hezbollah had threatened attacks if Israel proceeded with gas extraction in the disputed area before the deal was finalised.
What does the deal mean for Israel & Lebanon?
First, economic benefit due to improved security conditions. The deal means that work can begin almost immediately on the Karish field in Israel without the fear of being attacked. Israel should be able to make USD 207 - USD 237 million per month within weeks. Israel will get a cut from the Qana field when the production starts. Lapid claims the deal will promote regional stability. Israel gave up more territory than it initially wanted to but benefits in the short term with gas sales under improved security conditions. The exact gas in the Qana field is unknown, and current estimates are around USD three billion. However, Block 9 is larger than the disputed area, and getting royalty in this area would be profitable for Israel because it would earn revenue from the Qana gas field without spending any money for extraction.Lebanon will enjoy the economic benefits of the region north of Line 23, including the Qana oil field. The Qana field could bring Lebanon between USD 100 – USD 200 million per year. However, Lebanon still has to explore and strategize pumping gas from the Qana. Sector Experts said that making money would not happen until closer to the end of this decade. The maritime deal also opens the way for Lebanon, which is already suffering an unprecedented economic crisis, to benefit from improved energy and investment opportunities.
Second, ease of energy exploration. The deal said Israel gave up their territory for Lebanon, but Israel had the upper hand over Lebanon. Israel can negotiate terms with the gas extractor without consulting Lebanon. The US and Israel have used Lebanon’s current economic crisis to sign a maritime deal for Israel. Block 9 is the only area where gas has been confirmed in the Qana gas field, and the US has allocated royalty on that Block to Israel. The Karish gas field was ready to extract gas, which was awarded to Israel but before claimed by Lebanon as Line 29. The Qana gas field has a long way to go, which needs USD 1.6 trillion in investment for gas extraction. In 2017, Lebanon approved a license for an international consortium, including Total, ENI and Russian company Novatek to advance offshore oil and gas development in two of the 10 Mediterranean blocks. Novatek recently withdrew, and Qatar was keen to close the gap.
Third, a defined maritime sovereign territory. Israel claimed a line called Line 1. This line ran from 5 km offshore to each country's exclusive economic zone. On the other hand, Lebanon submitted a claim against called line 23 and ater extended this claim to line 29, which cuts through the Karish field Israel has discovered. A previous compromise line, the Hoff line, was scrapped in favour of a settlement along line 23, which covers most of Lebanon's claimed 1,430 sq.km of disputed waters. Unlike Israel, Lebanon is not a naval power and has not attempted patrols within its claims or gas prospects in its claimed areas, and this deal can make Israel patrol the Qana field on behalf of Lebanon.
Sethuraman Nadarajan is a Research Intern in the Scool of Conflict and Security Studies at the National Institute of Advanced Studies.
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