Iran's declarations about its willingness to assist Lebanon in developing its natural gas fields should not surprise Israel. Iran's interest is clear. Construction of infrastructure in Lebanon allows Iran to create a route for exporting natural gas and importing refined products that bypasses sanctions.
Moreover, Iran's announcement heralds the intensification of competition for Lebanon's natural resources between Arab and Muslim countries and international energy giants. After Egypt in the '90s, and Israel in the past decade, gas and oil exploration fever will migrate north in the coming years, along the same geological layers that have provided such joy for investors in Tel Aviv.
Geology knows no political borders, but geologists and business people know them very well. Just last month, a delegation of heads of Italian oil giant ENI visited Beirut for a meeting with Lebanese President Michel Suleiman about natural gas field development.
Israel can only dream of such a high-level delegation from of one of the oil majors. They avoid Israel, despite all the discoveries, for fear that investment here would put at risk their many interests in the Arab world.
Lebanon did not get excited over the guests. "Many more oil giants will soon appear here," one popular blogger wrote on the Beiruter website, "and each one will try to grab a piece of the canape."
It is very doubtful whether the news of possible Iranian involvement in Lebanese gas discoveries raised concern among investors and entrepreneurs in the oil and gas exploration sector in Israel. The general public has so far responded with ridicule to militant declarations made in recent months by senior figures in the regime in Lebanon and in Hezbollah.
We have seen it all before, in 2009.Then, following the "Tamar" discovery, the Lebanese parliament declared that the reserve belonged to Lebanon. So it declared, so what? This time too, many in Israel assume, it will continue to be gas business as usual on Noble Energy's platforms.
In the government, however, Lebanese intentions arouse considerable concern. According to foreign reports, Israel has hurriedly placed a line of buoys along the maritime border with Lebanon, to a distance of four miles into the Mediterranean Sea.
Meanwhile, Israel's Ministry of Foreign Affairs has managed to reach a quiet agreement with Cyprus on the maritime border between the two countries, and the government is trying to expedite passage of a Maritime Territories Law, which will lead to a declaration of the areas of the exploration licenses as an Exclusive Economic Zone.
Tshuva takes it seriously
So far, the only official Israeli reaction to the threats from Lebanon has been the declaration by Minister of National Infrastructures Uzi Landau that Israel "will not hesitate to use force to defend what is hers and to enforce international law."
The only businessman to take the Lebanese seriously is Yitzhak Tshuva. The controlling shareholder in Delek is convinced that this time the Lebanese are serious, and has been sounding warnings to anyone who will listen.
At a conference of haredi businessmen held in Jerusalem a couple of months ago, Tshuva was quick enough to be the first to offer Lebanon assistance, in the name of Delek and Noble, in the development of its gas reserves. "First give us back our gas," the Lebanese responded.
Israelis, no less cynically, would say that Tshuva and his partners have a clear economic interest in turning the spotlight northwards and diverting the public debate from royalties to the stable and friendly ground of security.
Instead of discussing royalties, we should join forces against the neighbors to the north, Delek will say. Exactly what they say in Lebanon about the neighbors to the south.
Minister Yossi Peled rushed to link the two issues, when he warned in a newspaper interview yesterday that the continuing debate over royalties would cause Israel to lose out in the competition with Lebanon for European consumers. In competing against Israel for the big export markets in Europe, Lebanon has a geographic advantage.
Lebanon is closer to Turkey and Europe, and its good relations with Syria enable it to construct a submarine pipeline along the coast, in shallow waters, while Israel would have to invest far larger sums - as much as $4 billion by one estimate - in constructing a pipeline in deep water to bypass Lebanese and Syrian waters.
Nothing to worry about
But there is another side to the coin. Israel may be boycotted because of the Arab world, but Lebanon too is no island of stability. The oil giants will not rush to invest billions in a country where it is not clear who is in control, and where so many other countries openly interfere.
As far as the exploration industry is concerned, Lebanon now is where Israel was a decade ago. In Israel, the possibility of exporting gas is just around the corner, and will become a reality if it turns out that the "Leviathan" prospect is indeed a discovery. Lebanon today has little to offer the Europeans beyond seismic surveys and a new oil law passed two months ago.
Israeli sources who follow events in Lebanon are convinced that, at the current rate of progress, the Lebanese will award the first licenses this year, and will start exploratory drilling within a year. The same sources believe that Lebanon will quickly be able to close the gap between it and Israel, and become a real competitor.
Past experience shows that Israel has no immediate reason for fear. Lebanon's natural resources will arouse internal (and external) conflicts no less severe than Israel's natural resources have provoked here.
Published by Globes [online], Israel business news - www.globes-online.com - on October 5, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010