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Israeli politics & society

Key background
  • The State of Israel was founded in 1948 with its foundational document being its Declaration of Independence. This declaration confirmed Israel’s nature as a Jewish and democratic state where all citizens were viewed as equals before the law, and freedom of conscience, worship, education, and culture were to be guaranteed.
  • Israel’s constitution is uncodified, but practically oriented towards a number of “Basic Laws” concerning state institutions and rights. They can only be overturned by a supermajority vote in the Knesset.
  • Similarly to the UK, Israeli government has three branches: the legislature (Knesset), judiciary, and executive (cabinet lead by the Prime Minister). The President is elected by members of the Knesset for a single seven-year term and acts as its head of state, but this role is almost entirely ceremonial.
  • Israel uses pure proportional representation to elect its MKs. As this functionally precludes any one party securing an outright majority, Israel is governed by coalitions formed by the leader of the party that generally wins the most seats.
  • The current President is Isaac Herzog, and the Prime Minister is Benjamin Netanyahu of the Likud. Other coalition partners include United Torah Judaism, Shas, the Religious Zionist Party, Otzma Yehudit, New Hope, and Noam.

Updated October 21, 2024

Netanyahu forms government

  • Twenty minutes before the midnight deadline on Wednesday night, Benjamin Netanyahu informed the president he had successfully reached agreements to form a government.
  • Netanyahu told Herzog, “Thanks to the massive public support we received in the recent general election, I inform you that I have successfully formed a government that will work for the benefit of all citizens of Israel,”
  • Herzog replied, noting, “you have promised to work for the benefit of the entire nation of Israel; I hope all of you enlist in this mission, at this period of time. May you be successful.”
  • The Likud is still in final negotiations with their right wing partners to conclude the coalition agreements, but some details have been released.

Likud – Religious Zionist Party: The agreement includes:

  • Prioritising legislation on judicial reform, both regarding the ability of the court to ‘override’ Knesset laws and changes to the judicial selection committee. The agreement notes the need to restore the proper balance between the legislative branch and the judiciary.
  • Eight billion shekels (£1.9bn) to be spent on a five-year plan to upgrade roads in the West Bank. This reverses the spending priorities of outgoing Transport Minister Merav Michaeli leader of the Labour Party.
  • Appointing a national religious chief rabbi (until now the roles of both Sephardi and Ashkenazi chief rabbis have been Ultra-orthodox).
  • Reviewing the ‘grandchild clause’ of the Law of Return. The current law allows non-Jewish grandchildren of Jews that have immigrated to Israel the full range of rights and benefits. The Likud has not fully accepted the cancellation and agreed that the law will be reviewed by a special committee.
  • A new kosher supervision law, which cancels a more decentralised version introduced by the outgoing government.
  • Legislating a new Basic Law: Torah Study.  This will enshrine bible study as a fundamental value recognised in law. It could then serve as precedent to justify learning instead of military service for Ultra-orthodox men.

Likud – Jewish Power:

  • The incoming national security minister, Itamar Ben Gvir, will have the authority to decide the rules of engagement for the police. The commonly cited example imagines a scenario involving an Israeli soldier facing someone holding a Molotov cocktail, and asks whether it’s necessary to wait before the cocktail is thrown before shooting, or if all other measures should be taken first, with live fire only used as a last resort.
  • In an unprecedented move the Shin Bet security service will expand its remit to deal with crime in Arab society.
  • To repeal the law preventing someone running for Knesset being disqualified on the grounds of incitement to racism. In the past, Ben Gvir’s allies were prevented from running.
  • Banning the waving or displaying of Palestinian flags in institutions funded by the state or in local authorities.
  • Establishment of minimum sentences of three years in prison for agricultural crime and three years for demanding protection payments.
  • Provide legal immunity for members of the security forces.
  • Defining incitement against the Ultra-orthodox sector as racism.

Likud – UTJ: This agreement has more than 120 sections, some of the ‘highlights’ include:

  • For the first time, UTJ will have a representative in the security cabinet, housing and construction minister designate Yitzchak Goldknopf.
  • A commitment that before the 2023 budget is passed, a new military draft bill will secure the status of yeshiva students.
  • The UTJ will have the right to veto all issues of religion and state.
  • Funding for religious institutions will be expanded and the budgets for educational institutions in the Ultra-orthodox community be made equal to those in general education.
  • A representative of the rabbinate will be a permanent member of the committee that decides on work permits during the Sabbath.
  • Leading prayer services at the Western Wall will be exclusively determined by the Chief Rabbinate and the rabbi of the Western Wall. This appears to cancel recommended reforms accommodating non-orthodox Jews.
  • Cancelling the outgoing government’s tax on disposable plates, cutlery items and high sugar soft drinks.
  • A committee will explore recognising rabbinical ordination as equivalent to a university degree to allow more ultra-Orthodox to apply for civil service jobs. Another section, considered unprecedented, states that five years of work experience be considered equivalent to a degree.

Netanyahu now has another week to complete the task of distributing government portfolios ahead of the formal swearing in ceremony.

  • The most significant remaining challenge will be the allocation of positions for Likud MKs.
  • As Yediot Ahronot commentator Sima Kadmon concluded: “The one thing that is likely to be somewhat reassuring is that not everything that’s written in these agreements will be carried out. As we learned from Netanyahu, pledges are one thing and implementation is another.”

December 21, 2022

Knesset in session for expanding police powers

The Knesset is in the midst of a marathon session as it tries to pass four pieces of legislation in the next few days.

  • There are four bills being debated in Knesset committees and being prepared for their second and third readings.
    • The first relates to the expansion of powers over the police for designated National Security minister Itamar Ben Gvir. Among the expanded powers, he wants more direct control over police operations and oversight of the police commissioner.
    • Secondly, an amendment to Basic Law: Government, to allow Shas leader Aryeh Deri to serve as minister (despite being convicted last year on tax offences). The new amendment will make a distinction between a suspended prison service (that Deri received last year) and serving prison time (that happened to Deri in the past).
    • The third change is also to the Basic Law: Government. It will move control over the Civil Administration (in the West Bank) and the Coordinator of Government Activities in the Territories from the ministry of defence to the leader of the Religious Zionist Party Bezalel Smotrich.
    • The fourth bill will repeal the clause in the Knesset law that allows four MKs to splinter off from an existing faction. This clause was changed by the previous government to try (unsuccessfully) to facilitate a split within the Likud. The repeal reverts to the previous situation that requires one-third of a party to split in order to form its own faction. 
  • Netanyahu is keen for the fourth bill to pass before he allocates ministerial portfolios and other positions to his Likud colleagues, lest those unsatisfied attempt a rebellion.
  • Itamar Ben-Gvir is still demanding veto power in the Knesset Constitution, Law and Justice Committee, but the Likud is opposed.
  • One issue on which Ben-Gvir could back down relates to ministerial oversight of the Police regarding criminal prosecution. The current compromise suggests the minister would have the power to determine which types of cases will be investigated, but not to interfere in specific cases.
  • Furthermore, this morning a moderated version of the Ben Gvir bill proposed that the minister will determine policy on investigations, including how long they will take, but only after first consulting with the police commissioner and the attorney general.
  • Ben Gvir has also reportedly agreed to insert a clause that stipulates that the police commissioner is the supreme commander, (but still subordinate to the minister).
  • Among other outstanding issues is Ben Gvir’s demand to give soldiers and police officers immunity for action taken during terrorist attacks.
  • Ben Gvir is also seeking revision of the rules of engagement used by the IDF and the police.
  • It appears Netanyahu is waiting to the very last moment to distribute ministerial portfolios and other positions to his own party colleagues. There is ongoing concern within his party that the coalition partners have already extracted too many concessions. One example is the Education Ministry, once seen as one of the most important positions. This time around it appears less appealing since various departments have been redistributed as part of the coalition deals.
  • Meanwhile, some of the most controversial proposals are expected to only have a vague commitment in the coalition agreement. For example, a new military draft bill, which places the Ultra-orthodox at odds with the Likud, will only be negotiated after the new government is formed.
  • Similarly, judicial reform and an ‘override clause’ are expected to only be discussed after the new government is sworn in. Bezalel Smotrich is still demanding an explicit promise to limit the authority of the judiciary. Netanyahu prefers to only make a vague commitment and wait a few months before moving forward.
  • However, if the legal establishment tries to reject one of the bills currently being prepared, for example, the Deri law, this could precipitate a constitutional crisis.

Netanyahu received a ten day extension of his mandate, which formally expires at midnight Tuesday. Though technically he can ask the president for an additional four-day extension.

  • Once Netanyahu formally updates the president that he has a government, the Knesset must convene a vote within seven days to swear in the new government.
  • They also need to publish the coalition agreements 48 hours ahead of the vote.
  • In parallel, Netanyahu hopes to have all of the planned legislation completed by the middle of next week.

December 14, 2022

Levin expected to be Knesset Speaker

Likud MK Yariv Levin is expected to be elected as the temporary speaker of the Knesset. This will finally give the incoming coalition control of the legislative process.

  • On Friday President Herzog agreed to extend Netanyahu’s mandate to form a government by ten days.
  • Herzog wrote to Netanyahu: “You said that you would form a government that would act on behalf of the entire public… Therefore, and in the spirit of your above-cited statements, I wish to repeat the call I issued on the day the Knesset was sworn in for the government that is formed to act on behalf of the entire Israeli public, and that the emerging coalition adhere to respectful and responsible dialogue.”
  • Over the weekend, the outgoing Prime Minister Lapid’s Yesh Atid Party and the Labour Party already began protesting the incoming government at various bridges and junctions. Lapid himself attended one of the demonstrations in Tel Aviv. He told the crowd, “We are here to tell the new government that is being formed that we aren’t your suckers. We aren’t here only to pay you taxes and to send our children to the army for a government that doesn’t send its own children to the army. Avi Maoz, who hates LGBTQs and hates women, won’t educate our daughters; and Itamar Ben Gvir, a violent criminal who was convicted of supporting terrorism and didn’t serve a single day in the army, isn’t going to send our children into battle. What’s being formed now is neither a Likud government nor a right-wing government; it’s the most extreme and the most insane government in the country’s history. Netanyahu is weak, and partners who are younger than him, more determined than him and more radical than him, have defeated him unconditionally. But we aren’t going to surrender. We are here to stay.”

Context: Levin is considered one of the Likud MKs closest to incumbent Prime Minister Netanyahu. He has served as the Likud’s lead negotiator during the coalition negotiations.

  • Levin will only be a temporary appointment because the Likud leadership could not agree to a permanent candidate at this stage. There are several Likud MKs vying for the position but it is dependent on the allocation of other ministerial positions that has not yet been decided.
  • The election of a new speaker is an essential step to forming the next government. Once in control of parliamentary proceedings they plan to pass a series of new laws before the government can be sworn in.  These include:
    • An amendment to Basic Law: Government to allow Shas leader Deri to serve as minister (despite being convicted last year on tax offences). The new amendment will make a distinction between a suspended prison service (that Deri received last year) and serving prison time (that happened to Deri in the past).
    • An amendment that would give Ben Gvir expanded powers over the police. Ben Gvir is set to be appointed national security minister. Among the expanded powers, he is seeking to place the police’s annual budget under his discretional purview. He also wants more direct oversight over the police commissioner.
    • Legislation that would move control over the Civil Administration (in the West Bank) and the Coordinator of Government Activities in the Territories, from the ministry of defence to Smotrich in the finance ministry.
  • Levin himself is considered the lead candidate to become justice minister. However, recent speculation has suggested his desire for judicial reform may be too extreme for Netanyahu.
  • From the outside a relatively homogeneous right wing religious coalition should have been easier to assemble. However, Israeli media is rife with speculation over disagreements and mistrust within the Likud faction and among the future coalition partners.

The first stage today will be for the Likud parliamentary faction to elect MK Yariv Levin as their candidate to serve as temporary Knesset speaker. Once approved by the faction, Levin’s nomination will be put to a vote in the Knesset plenum.

  • The new coalition then intends to pass several pieces of legislation within the next few days.
  • The plan is for these bills to pass their second and third readings by next week, to then allow the new government to be announced ahead of the December 21 deadline.
  • After informing the president, Netanyahu will have an additional seven days to formally swear-in the new government.

Ultra-orthodox demands: In addition to the coalition agreement on portfolios and legislation Channel 12 News revealed a slew of demands that have reportedly been agreed between Likud and United Torah Judaism (UTJ). However, according to the Likud not all these demands will be met.

  • Among the issues:
    • Stopping the production of electricity on the Sabbath.
    • Adding a representative of the Chief Rabbinate to all committees that decide on government work permits on the Sabbath.
    • Adding NIS 100 million (around £24m) in Education Ministry funding for Ultra-orthodox culture.
    • Initiating affirmative action to add Ultra-orthodox candidates to the board of directors of government companies.
    • Increasing the number of gender-separated beaches, proportionate to the size of the ultra-Orthodox population.
    • Government funding for the correct disposal of damaged holy documents containing God’s name, (according to Jewish law they must not be thrown away but buried).
    • Expanding Bible and Talmud studies in secular schools.
    • Establishing a government-funded hotline that will provide answers for questions related to Jewish religious law.
    • Allowing the heads of hospitals to prohibit unleavened bread being brought into hospitals during Passover.
    • Ensuring any government service now provided via the internet will also be available by phone operators or in person.
    • A review (with a view to closing) of the Diaspora Affairs Ministry’s department that deals with Reform Judaism.
    • Cancelling the outgoing governments reforms to the ‘kosher phone’ (non-smart phone) market.
  • Incoming Prime Minister Netanyahu related to the report from the Knesset plenum yesterday saying, “There is and will be electricity on Sabbath, there are and will be beaches for everyone. We will maintain the status quo, everybody will live according to their own beliefs.” He added that the state will not be governed according to Jewish Law. Insisting, “There will be a state here that will take care of all the citizens of Israel without exception. We were chosen to lead in our own way, the way of the national right and the way of the liberal right and we will do so.”
  • Outgoing Prime Minister Lapid responded saying, “The UTJ-Likud agreement is a disgraceful surrender agreement….If they think we’re going to pay taxes, go to the army, bankroll people who don’t work and then for them to tell us to lead our lives, I have news for them: We won’t allow Israel to become a benighted country. Netanyahu is weak and is selling our freedom for his own freedom.”

Looking ahead: Later today the police commissioner will appear in front of a special Knesset committee and give his opinion on the proposed changes.

  • The appointment of Levin as speaker is a temporary move for the next couple of weeks to facilitate the passing of those four pieces of legislation before the new government is sworn in. At the second stage a permanent speaker will be elected and Levin is expected to be the next minister of justice.
  • The plan is for these bills to pass their second and third readings by next week, to then allow the new government to be announced ahead of the December 21 deadline.
  • After informing the president, Netanyahu will have an additional seven days to formally swear-in the new government.

December 5, 2022

MK Maoz appointment criticised

Local government, school principals and parent groups have all heavily criticised the appointment of MK Avi Maoz from the Noam Party to a position within the Prime Minister’s office with authority over external curricula content in the state-run education system.

  • Maoz is best known for his long-standing opposition to the LGBTQ community and highly conservative views.
  • In response to his appointment the Tel Aviv municipality declared it would continue to fund external educational content “in keeping with the spirit of this city.” Tel Aviv Mayor Ron Huldai said, “The message that has been sent from local authorities is strong and clear: We will not allow anyone to play games with the education of our children. I will make sure that in our city, we continue to educate in keeping with our values.”
  • Over the weekend, dozens more mayors, including from the Likud, expressed their objections to Maoz’s appointment and announced that they would fund educational content themselves. The Likud Mayor from Bat Yam Tzvika Brot said, “No party has a monopoly on Judaism, just as no party has a monopoly on pluralism. We will not allow anyone to meddle with our policies or values and change the status quo in this city.”
  • Ramat Gan Mayor Carmel Shama Hacohen, a former Likud MK, said “The city of Ramat Gan will fund two hours of class time on liberalism, inclusiveness and equality for every hour the government slashes on those topics.”
  • In addition, around 200 school principals sent a letter to the designated prime minister Netanyahu. They wrote, “We, school principals from across the country, from a range of sectors will stand strong to protect our democracy and the basic rights of the citizens of this country when it comes to issues related to the Basic Law: Human Dignity and Liberty. We hereby express our opposition to the removal of the unit responsible for external content and partnerships from the Education Ministry and transferring responsibility for that unit to a department that will be headed by Avi Maoz of the Noam Party, who has openly expressed his racist, homophobic views that are very benighted and very extreme, which cancel, divide, tear apart and hurt entire communities and broad identities in Israeli society. We will not allow benighted views to dictate the agenda in our schools. We call for this decision to be changed immediately,”
  • In addition, more than 660 civics teachers and educators wrote, “We will not quietly accept educational leadership that promotes, via legislation and action, anti-democratic actions that is damaging to human rights.”

Context: The Noam Party was elected as part of the Religious Zionist list, but since the election the list has splintered into its constituent parts, leaving Maoz as his own one-person faction.

  • According to the agreement he reached with the Likud, Maoz will serve as a deputy minister in the Prime Minister’s Office.
  • He will head the unit for external content and partnerships that was taken from the Education Ministry. The role overseas all of the curricula beyond core curricula, such as maths, English, sciences.  The unit has a budget of NIS 2 billion (around £480m).
  • Privately, some in the Likud now acknowledge that this appointment was a mistake. They had thought that the unit was a small and unimportant department in the Education Ministry, and failed to realise the influence he could have.
  • One theory under consideration is to hold up the transfer of authorities to Maoz, to create a crisis whereby Maoz will resign and quit the coalition. The coalition could still function with 63 instead of 64 members. However, others in the Likud have dismissed this approach.
  • Another suggestion is that Netanyahu himself would oversee Maoz. Responding to this idea, outgoing prime minister Lapid wrote yesterday on Facebook: “Netanyahu said that he would ‘personally supervise’ the Gefen Unit, which is responsible for educational programmes at schools. Netanyahu knows that that’s a lie. He is saying that in the hope that the storm will blow over. Netanyahu knows that he has done something terrible—he has placed in the hands of a dangerous racist a budget of more than two billion shekels, with an open ticket to the hearts and minds of every child in Israel. Don’t let Maoz near your children. The authority is in your hands, and you can stop this.”

Looking ahead: Tomorrow the outgoing education minister, Yifat Shasha-Biton, is scheduled to convene an emergency conference. Attendees are expected to include outgoing Prime Minister Lapid, Defence Minister Benny Gantz, MKs, mayors, former education ministers, educators, parents and representatives of civil society organisations.

December 2, 2022

Coalition agreement reached

Prime Minister designate Benjamin Netanyahu’s Likud and Bezalel Smotrich’s Religious Zionism have reached an agreement in their coalition negotiations.

  • The sides appear to have reached an understanding over the recognition and provision of services to outposts hitherto illegal under Israeli law (and referred to euphemistically as ‘newer settlements’).
  • These unauthorised settlements are set to be connected to water and electricity supply within two months, and those built on “state land” legalised within a year.
  • Smotrich will head an expanded Finance Ministry in rotation (after two years) with Shas leader Aryeh Deri, who will be appointed to both the Health and expanded Interior Ministry briefs.
  • Netanyahu had denied Smotrich the coveted defence portfolio, but instead will expand his party’s influence over some aspects of West Bank policy.
  • The Defence Ministry will retain the offices of Civil Administration in Judea and Samaria and Coordinator of Government Activities in the Territories. Crucially, however, a Religious Zionism MK – likely either Orit Struck, Smotrich himself, or a combination– will oversee both offices and wield considerable influence over settlement policy.
  • Religious Zionism will also control the Immigration and Absorption Ministry (with Ofir Sofer the likely minister) and the chairmanship of the Knesset’s Constitution, Law, and Justice Committee (likely to be held by Simcha Rothman).

Other cabinet positions: The senior roles of Defence, Foreign, and Justice Minister will be filled from within the Likud and are expected to go to Yoav Galant, Amir Ohana, and Yariv Levin respectively. The Education and Transport ministries are likely be to headed by Likud MKs Eli Cohen and Miri Regev.

  • Shas will control the Religious Affairs and Welfare ministries.
  • Jewish Power leader Itamar Ben Gvir will be named National Security Minister and receive an expanded public security portfolio, including authority over Border Police operating in the West Bank.
  • Noam Party Chairman Avi Maoz’s will assume a “Jewish Identity” role in the Prime Minister’s office and will also oversee the Education Ministry’s external programming and collaborations.
  • The previous Negev, Galilee and Periphery Development Ministry will likely see its brief divided in two, with a Negev and Galilee portfolio handed to Jewish Power and responsibility for the periphery portfolio subsumed by an Interior Ministry under Shas control.

Context: The successful negotiations represent a major achievement for Religious Zionism.

  • Its oversight of West Bank civilian policy and control of the Immigration and Absorption Ministry and the Knesset’s Constitution, Law, and Justice Committee portfolio could prove crucial to the chances of implementing some of its most controversial legislative ambitions, including:
    • Changes to the Law of Return, including the removals of the “Grandfather Clause” (expected to be opposed by Netanyahu) and the recognition of non-Orthodox conversions for the purpose of immigration.
    • Increased building in settlements and clamping down on illegal Palestinian construction in area C.
    • Judicial reform, likely to include a Knesset override of Supreme Court rulings.
    • Barring the indictment of a sitting prime minister (the so-called ‘French Law’) and also providing immunity from criminal prosecution for ministers.
  • Netanyahu has sought to calm international concern by claiming that policy will reflect a traditional Likud approach. “Defence”, he said in a recent interview, “is not merely… preventing incoming missiles. It’s also deciding on policies that could be quite inflammatory. I’m trying to avoid that.”
  • Netanyahu has also made comments designed to reassure international and domestic audiences that despite the dominance of religious parties in the coalition, Israel will remain guided by secular traditions in forming its laws: “Israel is not going to be governed by Talmudic law”, he said.
  • United Torah Judaism officials are said to be angry that the Likud has prioritised concluding coalition deals with Jewish Power, Religious Zionism, and Shas over them. A UTJ source is quoted saying: “They think they can buy us with crumbs. That isn’t going to happen.”
  • Likud MKs are also said to be angry that Religious Zionism and Shas have been so well rewarded at the expense of their own part.
  • The announcement of Moaz’s roles has prompted concerns from Diaspora leaders and LGBTQ organisations.
    • The former are worried over Moaz’s proposals to annul recognition of non-Orthodox conversion and to restrict the right Aliyah to those who can prove at least one Jewish parent.
    • The latter fear that Moaz will use his educational remit to promote an anti-LGBTQ agenda, having been vocal opposing LGBTQ rights and having promised to end Jerusalem’s annual Pride Parade.
    • Outgoing Education Minister Yifat Shasha-Biton recently lamented that “a man for whom hatred is his vocation is going to control the materials that get taught at schools.”

Looking ahead: The breakthrough with Smotrich opens the possibility of Netanyahu being able to present a government to President Isaac Herzog by the initial deadline of December 11th.

  • However, it has been reported that Netanyahu plans to request that Herzog trigger a two-week extension, giving him until December 25th to ensure not only that all posts are filled and the coalition’s agenda coordinated, but also that Deri’s legal position has been clarified.
  • Deri’s appointment will require the Knesset to pass new legislation – already prepared by Shas – clarifying that a suspended sentence does not meet the threshold of moral turpitude required to bar someone from ministerial service.
  • To do this, the coalition bloc will first need to take over the parliamentary process by electing a new Speaker of Knesset. This will go to a Likud MK, though Netanyahu has not yet decided whom to appoint as it is dependent on first filling cabinet posts.

July 22, 2020

Chevron to take control of Israeli offshore gas fields

BICOM News
BICOM News

What happened: The Chevron Corporation has announced an agreement to acquire Noble Energy for $5 billion in stock.

  • The deal includes Noble’s stake in Israeli offshore natural gas fields, meaning Chevron will now become the operator of the Leviathan and Tamar gas fields in the Mediterranean. Chevron will also acquire Noble’s 35 per cent stake in Cyprus’s Aphrodite gas field. This is the first time a major oil company has entered the Israeli energy market.
  • Israel’s Energy Minister Yuval Steinitz said the deal represents a “tremendous expression of confidence in the Israeli energy market and the continued development and export of natural gas from the State of Israel.”
  • US Energy Secretary Dan Brouillette tweeted: “The US-Israeli energy relationship remains stronger than ever. This administration strongly supports the development of Eastern Mediterranean gas resources, and we look forward to what American ingenuity can do to boost energy development and security in the region.”
  • Chevron CEO Mike Wirth told Reuters that the company was “mindful of the fact that there are political differences and tensions” between Israel and its neighbours, where Chevron also does business, thought emphasised that it is “apolitical” and “a commercial actor”. Chevron has recently acquired drilling rights in western Egypt and the Red Sea, and already operates in Saudi Arabia, Kuwait, Qatar and the Kurdish region of Iraq.

Context: According to Israel’s financial newspaper Globes, “Chevron’s decision to buy Noble Energy is also a result of the significant change in Israel’s status in the region in recent years and its relations with Gulf states”.

  • A market source told the paper: “The tensions with Iran don’t only impact Israel but also our neighbours like the Gulf states and Israel has successfully positioned itself on the site of the Arab states. There is no doubt that a huge corporation like Chevron took that into consideration. If there had not been these regional changes, it is difficult to believe that a deal like this could have taken shape.”
  • At the beginning of the week the Israeli government approved an agreement with European countries for the construction of a pipeline under the sea that would supply Europe with natural gas from the eastern Mediterranean. The pipeline will transport the offshore natural gas from Israel and Cyprus to Greece and on to Italy, which still needs to approve the project. Minister Steinitz said: “The government approval of the framework agreement for laying the Israel-Europe natural gas pipeline is another historic milestone for making Israel an energy exporter. This move will bring in tens of billions of dollars for Israel, which will benefit the state and the public in years to come.”
  • The East Mediterranean arena is increasingly becoming engulfed in regional tensions. Last year Turkey and Libya agreed to adjoin their exclusive economic zones (EEZs), in what was perceived as an attempt to deter construction of the pipeline. Although such lines can be built through the EEZs of third countries, permission would need to be obtained first. Meanwhile Egypt, the dominant player in Mediterranean in terms of energy reserves, is on opposing side to Turkey over the crisis in Libya, complicating efforts for energy agreements in the Mediterranean.

Looking ahead: Minister Steinitz told the Times of Israel that he will “examine the request for the transfer of ownership of the rights to the fields once it is submitted to the ministry. By Israeli law, the rights to energy fields cannot be transferred without approval of Israel’s petroleum council.”

  • The deal is viewed as an important long-term investment for Chevron as Israel natural gas fields are the largest in the eastern Mediterranean. The deal could help Chevron reduce their carbon footprint as gas is seen as a cleaner alternative.
  • According to Reuters, the pipeline is expected to be completed by 2025 and will help Europe diversify its energy resources. The pipeline is planned to initially carry 10 billion cubic meters of gas a year with the possibility of eventually doubling the capacity. A land and sea survey is currently underway to determine the route of the 1,900-kilometer pipeline.

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