A View on Israel: Joseph Paritzky, Former Minister of Energy
Natural Gas Europe had the pleasure to interview Joseph Paritzky, Former Minister of Energy & National Infrastructure of Israel, at the sidelines of a conference in Brussels. We spoke about possible schedules for Israel's energy laws meant to create a regulatory framework to promote energy investments in the country. We also discussed Israel's role in the region. "Israel has to continue its efforts to secure a stable regulatory environment. If, by any chance, the opposition, or the NGOs, the Supreme Court stopped it, this would be very bad news" Paritzky commented.
In recent conferences, you explained that the government has to create a level playing field for companies to enter into Israel. You also underlined the role of the Israeli government in this, which is simply to create an ad-hoc regulatory framework and environment. Do you have any schedules and timelines for this?
Let me put it this way. I think it will be ratified by the Parliament before the summer session that is probably by the end of this month. I anticipate that some NGO groups, which oppose it, will petition the Supreme Court, and I anticipate the Supreme Court to rule against them, somewhere between two to three months. Hence, I would assume that these guidelines will be in full force and validity around October, November this year.
Slightly changing the topic. Much attention has been devoted to the Gaza Marine field. I recently interviewed the Energy Advisor to the Quartet Representative Tony Blair, who told me that it is in Israeli interest to develop the Gaza Marine field, as that would increase the scope for cooperation with Jordan. We also saw that, in terms of contracts, there have been many Memoranda of Understanding, but then few binding deals. That’s also the case for the cooperation between Israel and Jordan. Also in this case, the big contracts did not materialise, and the only contract is with Arab Potash - a rather small contract indeed. In light of this, do you think that the development of the Gaza Marine field is in Israel's interest?
It was always in the Israeli interest. The problem is who runs the business there and what is going to be done with the funds. Because, if it is developed and sold to Israel, 10% belongs to the Palestinian Investment Fund that nobody exactly knows who runs it. Now. We would not like to support Hamas - that now rules Gaza - building more rockets against us. So actually they have to decide what they want to do. If we can secure that the revenues from this field would go for peace processes - in other words, building houses in Gaza, schools, roads, water infrastructures, what have you - then I think it is a good thing. I doubt very much whether Hamas will allow itself now to get in contact, and in contract with the potential Israeli buyer, but maybe you know more than me.
Perfect. So you are basically saying that the development will take off when there is more clarity about the Palestinian Investment Fund. Did I get that right?
No. What I am saying is that we need to have some form of security from Hamas. Unfortunately, the only security that we have right now is when we fight with them and we destroy their tunnels, and then we understand that they have no weapons. But now they are renewing their artillery again. What Hamas needs to do is to change its skin. They should come and say: listen fellows, we are here, the Israelis are here, let’s see if we can cooperate, and do something together. Once it is done, yes, we would be very happy to.
Apart from that, there has been a strong focus on Israel. However, considering the Mediterranean, and developments in the region, only a few words have been spent on Egypt. The country holds the third largest gas reserves in Africa after Nigeria and Algeria. It has more gas than Libya.
As far as I understand it, it needs it for local consumption. Egypt is a highly and quite rapidly developing country, which is very good. The government of Egypt is trying its best to elevate the level of its citizens. For this, you need a lot of energy. You need electricity to be in the villages, you need energy. As far as I know, and again, I am not an expert in Egyptian energy, they are trying their best to get all their gas to local consumption, to the local market and not to export it.
The devil is in the details. We know that Egypt issued a five-year tender to lease a second LNG import terminal in May, which means that they don’t expect to import so much gas in 5 years. Do you think that Egypt could manage to significantly increase production, as the presence of BP and ENI in the country seems to indicate?
Listen. Gambling on Egypt is a very wild gambling. Right now, there is a stable regime, that I wish full success. However, it is a turmoil, like many Arab countries. I do not know, I hope I am wrong, but I don’t know what’s going to happen in the next 2-3 years. I hope they will continue to be stabilised, they will continue following the rule of law, and the Muslim Brotherhood will diminish there. Can you guarantee that? Can anybody guarantee that? No.
Is it in Israeli interest to build pipelines to Jordan?
Israel does not build pipelines to Jordan.
Ok. Let me rephrase it. Is it in Israeli interest to create the right business environment for companies, mainly Israeli companies, to invest in regional gas infrastructures?
We would really like to cooperate with Jordan as much as possible, to cooperate with Egypt as much as possible, and to cooperate with each and every Arab country as much as possible. There are some sensible Arab countries that have more or less a stable regime that are in peace terms with us. This is Jordan, and Egypt. We are very happy with it.
What are the possible mistakes that Israel might make that may threaten its ties with Egypt and Jordan?
Israel has to continue its efforts to secure a stable regulatory environment. If, by any chance, the opposition, or the NGOs, the Supreme Court stopped it, this would be very bad news.
Also in terms of geopolitical relations with Jordan and Egypt?
With Jordan and Egypt, we have excellent geopolitical relationships.
I am for example referring to the Al-Aqsa incident. Are similar incidents factors to take into consideration?
Every incident can be taken into consideration, if people want to take it into consideration. What’s the Al-Aqsa incident you are talking about?
There were tensions between Jordan and Israel on how to secure the access to the Al-Aqsa mosque in Jerusalem. I’m referring to the moment in which police chased Palestinian worshippers. In other words, I am referring to how to control and manage the access to the mosque.
Yes, but it has been solved in an amicable way, between two countries. It was beautifully solved.
Let me rephrase. My question is: is there anything Israel has to refrain from? Are there decisions to be avoided to strengthen its ties with Jordan and Egypt?
We cannot control Arab extremists, and fundamentalists. Unfortunately, they are in the neighbourhood. We cannot control them. We wish they were more sensible, we wish they were more democratic, we wish they were more in Western style. We see ourselves as part of the region. There are some Arabs that don’t want us in the region. Unfortunately, we have to fight with them. There are some Arabs who want us in the region and want to cooperate with us. The more we cooperate with them, the better it is.
Recently you said that you did not see room for the Leviathan, explaining that the development is highly unlikely in the foreseeable future.
We need a buyer.
Today you sounded a bit more optimistic.
Quite frankly, I don’t see a buyer. Analysing the situation, you need a good potential buyer to develop such a huge field to market.
Do you see any possible cooperation with European companies?
I would very much like to see European companies coming to the Israeli gas market. I think it is a good opportunity.
As stakeholders or as buyers?
Whatever they want. The market is open.
Sergio Matalucci is an Associate Partner at Natural Gas Europe. He holds a BSc and MSc in Economics and Econometrics from Bocconi University, and a MA in Journalism from Aarhus University and City University London. He worked as a journalist in Italy, Denmark, the United Kingdom, and Belgium. Follow him on Twitter: @SergioMatalucci