Former IDF chief of staff Lt.-Gen Moshe Yaalon has closed ranks with the Likud by criticizing the natural gas deal with BG Group plc (NYSE: BRG; LSE: BG) from fields offshore from Gaza which are jointly owned by the Palestinian Authority. In an article for the Jerusalem Center for Public Affairs, he says that the government should not approve the deal because proceeds might finance terrorism.
Yaalon says, “British Gas is supposed to be the crown jewel of the Palestinian economy, and provide part of the solution to Israel's pressing energy needs… The market value of the gas has been estimated at $4 billion. Therefore, sale of the gas to Israel would mean a billion-dollar windfall for the PA and, potentially, for the Palestinian people. Unfortunately, British assessments, including those of former Prime Minister Tony Blair, that Gaza gas can be a key driver of an economically more viable Palestinian state, are misguided. Proceeds of a Palestinian gas sale to Israel would likely not trickle down to help an impoverished Palestinian public. Rather, based on Israel's past experience, the proceeds will likely serve to fund further terror attacks against Israel. No less threatening is the fact that terror organizations associated with the global Jihad, like al-Qaeda, will be highly motivated to attack any British Gas installation off Gaza's shores that provided fuel to Israel.”
He notes, “Clearly, Israel needs additional natural gas sources, while the Palestinian people sorely need new sources of revenue. However, with Gaza currently a radical Islamic stronghold, and the West Bank in danger of becoming the next one, Israel's funneling a billion dollars into local or international bank accounts on behalf of the Palestinian Authority would be tantamount to Israel's bankrolling terror against itself. Therefore, an urgent review is required of the far-reaching security implications of an Israeli decision to purchase Gaza gas.”
Negotiations between the Israeli government and British Gas have reached an advanced stage. Talks were resumed in 2006 after lobbying by the British government and after British Gas proposed selling the gas to Egypt instead of to Israel.
Yaalon contends that former Prime Minister Sharon opposed the British Gas deal. “Today, Prime Minister Olmert has revived the relationship with BG and has exerted much energy to reach a definitive agreement for the purchase of the offshore natural gas.” Yaalon also claims, “For Israel, the need for BG's gas may have already taken a toll. It is possible that the prospect of an Israeli gas purchase may have played a role in influencing the Olmert cabinet to avoid ordering a major IDF ground operation in Gaza, despite at least 1,000 rocket and mortar attacks against southern Israel since the Hamas takeover of Gaza in June 2007.”
Published by Globes [online], Israel business news - www.globes.co.il - on October 21, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007