LONDON, 10 February 2019
David Sheppard and David Keohane
Israel’s energy minister Yuval Steinitz, who was visiting London to drum up interest in the country’s next gas licensing round and discuss energy co-operation, said companies such as Total that refused to invest in Israel were living in “past decades” and were in hock to the “tyranny and dictatorship” of Tehran.
“I reject it with two hands, I think this is a miserable view,” Mr Steinitz told the Financial Times.
“We will consider our reaction to this as it is totally unacceptable, to boycott [Israel].”
Patrick Pouyanné, Total chief executive, told the FT in an interview that it was too “complex” to invest in Israel despite the country’s growing role as a gas producer, indicating his company’s relationships with other states in the Middle East was a sticking point.
“We like complex situations . . . up to a certain point. Let’s be clear,” said Mr Pouyanné, adding that the stakes in Israel were not big enough to accept the risks involved, in part due to the competition already in the region.
Total was set to be the biggest international investor in Iran — with plans to develop part of the super giant South Pars gasfield — before the reimposition of US sanctions last year made it pull out.
The French company is, however, investing in the eastern Mediterranean basin, a booming gas prospect of which Israel is part.
Last year, Total signed licences, along with Russia’s Novatek and Italian major Eni, to explore waters near Lebanon, raising hackles in Israel, though Total has said it will not drill in territorial waters contested by Beirut and Jerusalem.
Total, along with Eni, is also present in Cyprus and Egypt and, last year, the French company expanded in Libya, picking up a stake in the country’s Waha concession from Marathon Oil.
Mr Steinitz said Israel’s development of its gas resources was helping improve relationships with its neighbours, with the country agreeing more than $20bn in long-term deals to sell gas to Egypt and Jordan.
In January, Israel joined a group with Egypt, Cyprus, Greece, Italy, Jordan and the Palestinian territories called the Eastern Mediterranean Gas Forum, which will look to increase co-operation on gas resources.
Israel hopes to develop a subsea gas pipeline that can deliver supplies to Europe via Italy and Greece, at a time when production from other local sources of supply for the continent are in decline.
Israel has been able to sharply cut its reliance on coal due to gas finds, including the Leviathan and Tamar fields, with plans for further exploration.
Mr Steinitz said that other international companies that had invested in Israel had not encountered any problems in the Arab world, listing Google, Lockheed Martin and Boeing among others.
“Companies that were afraid to make investments in Israel in the past because of the Arab Muslim world made the wrong calculation,” Mr Steinitz said, adding he had met many energy ministers from Gulf Arab states in recent years.
“If somebody is avoiding investing in Israel because it might have interests in Iran then that can be the only reason, because the Arab world is not concerned.”
Israel has struggled to attract energy majors to help develop its gas resources. Texas-based Noble Energy and Israeli company Delek Resources have been the two main developers so far, with some executives suggesting the largest international operators are still wary of the fragile politics of the Middle East.
“It’s not only Total who faces these kinds of realities in the region,” said a person from the industry.
SOURCE
“We will consider our reaction to this as it is totally unacceptable, to boycott [Israel].”
Patrick Pouyanné, Total chief executive, told the FT in an interview that it was too “complex” to invest in Israel despite the country’s growing role as a gas producer, indicating his company’s relationships with other states in the Middle East was a sticking point.
“We like complex situations . . . up to a certain point. Let’s be clear,” said Mr Pouyanné, adding that the stakes in Israel were not big enough to accept the risks involved, in part due to the competition already in the region.
Total was set to be the biggest international investor in Iran — with plans to develop part of the super giant South Pars gasfield — before the reimposition of US sanctions last year made it pull out.
The French company is, however, investing in the eastern Mediterranean basin, a booming gas prospect of which Israel is part.
Last year, Total signed licences, along with Russia’s Novatek and Italian major Eni, to explore waters near Lebanon, raising hackles in Israel, though Total has said it will not drill in territorial waters contested by Beirut and Jerusalem.
Total, along with Eni, is also present in Cyprus and Egypt and, last year, the French company expanded in Libya, picking up a stake in the country’s Waha concession from Marathon Oil.
Mr Steinitz said Israel’s development of its gas resources was helping improve relationships with its neighbours, with the country agreeing more than $20bn in long-term deals to sell gas to Egypt and Jordan.
In January, Israel joined a group with Egypt, Cyprus, Greece, Italy, Jordan and the Palestinian territories called the Eastern Mediterranean Gas Forum, which will look to increase co-operation on gas resources.
Israel hopes to develop a subsea gas pipeline that can deliver supplies to Europe via Italy and Greece, at a time when production from other local sources of supply for the continent are in decline.
Israel has been able to sharply cut its reliance on coal due to gas finds, including the Leviathan and Tamar fields, with plans for further exploration.
Mr Steinitz said that other international companies that had invested in Israel had not encountered any problems in the Arab world, listing Google, Lockheed Martin and Boeing among others.
“Companies that were afraid to make investments in Israel in the past because of the Arab Muslim world made the wrong calculation,” Mr Steinitz said, adding he had met many energy ministers from Gulf Arab states in recent years.
“If somebody is avoiding investing in Israel because it might have interests in Iran then that can be the only reason, because the Arab world is not concerned.”
Israel has struggled to attract energy majors to help develop its gas resources. Texas-based Noble Energy and Israeli company Delek Resources have been the two main developers so far, with some executives suggesting the largest international operators are still wary of the fragile politics of the Middle East.
“It’s not only Total who faces these kinds of realities in the region,” said a person from the industry.
SOURCE
