It's always nice to start a new job with a trick up your sleeve, and the Middle East's new envoy Tony Blair could be forgiven for thinking he has just that. In the near future, a $4bn deal to exploit Gaza's offshore gas reserves will be signed by the Israeli government, Britain's BG Group (BG), the Palestinian Authority (PA)'s investment arm, the Palestine Investment Fund (PIF) and Consolidated Contractors Company (CCC). Environmental considerations notwithstanding, an injection of this kind of capital into the occupied territories could transform the political landscape.This story about Gaza's gas has been around for a while but this Blair involvement thing is a new angle. Some say that the sale of Palestinian gas to Israel was one of the things that prompted Hamas to kick Fatah out of Gaza. So it seems that the man now posing as the honest broker in the Middle East intervened in a deal that may have sparked off the recent civil strife in Gaza. No wonder Blair got then his Foreign Minister to call the Hamas victory in Gaza a coup d'état
By fortune or design, Tony Blair has been crucial to the deal's genesis. But the pressure he has put on other parties to agree a deal that economically ties the PA to Israel has exacerbated Fatah-Hamas tensions, put the PIF on the political defensive, and may even have helped stoke the recent fighting in Gaza.
It was the Gaza-Jericho first agreement in 1994 that first allocated the PA a 20-mile maritime zone off Gaza's coast. But it was not until 1999, the year that BG gained its exploration concession on the field, that Israel agreed to "give" it to the PA. In exchange, the PA signed away "full security control" of the sea off Gaza to Israel. They probably thought they had got a bargain.
The Gaza maritime field is estimated to contain between 35-40bn cubic metres - or one trillion cubic feet - of gas. In the words of the British Foreign Office, it is "by far the most valuable Palestinian natural resource" and revenues from its output are usually estimated at $4bn. For this reason, Ariel Sharon always opposed its development, claiming that monies raised might be used to arm Israel's enemies.
In the summer of 2005, when Sharon was focused on "disengagement" from Gaza, BG signed a memorandum with the Egyptian company EGAS to sell the gas there. However, the deal was scuppered a year later, when Tony Blair intervened at the last minute to plead the Israeli government's case to BG, allegedly following a request from Ehud Olmert.
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