US-mediated talks between Lebanon and Israel expected to begin in weeks

TUNIS – Lebanon has agreed to enter US-brokered talks with Israel over a disputed maritime border.

Lebanon has not commented publicly on its participation in such talks; however, Israeli sources indicated that negotiations could begin in July. It is understood that discussions would concern only the maritime border.

Acting US Secretary of State for Near Eastern Affairs David Satterfield has been shuttling between both countries’ capitals for months and is believed to have achieved a breakthrough after meeting with Lebanese Foreign Minister Gebran Bassil in late May.

A statement, carried by Lebanese state media following a recent Satterfield meeting in Lebanon, said the Foreign Ministry confirmed that no major obstacles remained ahead of negotiations but that more trips were required.

“We started putting the final touches on the form of negotiations and the role of the concerned parties, including the United Nations, Lebanon and Israel, as well as the role of the United States,” the statement said.

Israel’s discovery of the Tamar and Leviathan gas fields in 2009 and 2010, respectively, increased the rate of exploration across the eastern Mediterranean, with discoveries later made in Cypriot and Egyptian waters.

Of the Lebanese blocks open to commercial exploration, one, Block 9, borders Israel’s declared maritime zone. The disputed maritime border touches two other blocks, though neither are yet licensed. French multinational (Total SA), whose consortium was awarded exploration rights over Block 9 in February 2018, said that it would not drill near the disputed border.

While the extent of gas reserves off the Lebanese coast have yet to be confirmed, seismic studies indicated that as much as 25 trillion cubic feet could lie beneath the seafloor. Analysts cautioned that not all of gas may be commercially viable.

Given the extent of potential hydrocarbon reserves, the stakes for both countries are high. “Demarcating the border would be important for both Lebanon and Israel, particularly as it would probably be used by Israeli PM [Binyamin] Netanyahu as a political victory going into new elections,” said Jack A. Kennedy, a senior analyst with IHS Markit.

However, as Lebanon prepares to usher in a period of unparalleled austerity, opening the fields to further exploration stands to be vital.

“The Lebanese economy is struggling to absorb Syrian refugees who fled the war in Syria and that conflict has also cost Lebanon one of its largest trading partners. Public sector debt is more than 150% of GDP,” Kennedy said. “Additionally, US sanctions against Hezbollah, as part of a wider confrontation in Iran, have dented international confidence in the Lebanese economy.”

Hezbollah’s position regarding the border dispute has become increasingly strained. Though Hezbollah-aligned newspaper Al Akhbar warned against opening negotiations with Israel, the group “would be looking to get a share of any potential gas deals that were signed once the border was fixed,” Kennedy said. “Its finances have been increasingly strained as its main international financial backer, Iran, has come under much tougher economic sanctions from the US to force it into a renegotiation of the nuclear deal.”

The opening of negotiations between Israel and Lebanon, two countries that technically remain in a state of war, potentially begins a new chapter in relations across the eastern Mediterranean, as hydrocarbon deposits become important adjuncts to foreign policy.

Kennedy said that, following the establishment of a modern and effective regulatory framework, “Egypt in particular is looking to establish itself as an energy import and export hub for the eastern Mediterranean, both by exploiting its own domestic offshore gas reserves to reduce its reliance on imports and to utilise its existing infrastructure to import Israeli gas for domestic use and export.”

Discussions are under way to establish a pipeline between Cyprus and Egypt, with Israel hoping to begin exports to Jordan, despite domestic Jordanian opposition. “Of interest here is the East Med Gas Forum that sat for the first time in January this year,” Kennedy said, “featuring Egypt, Israel, Greece, Cyprus, Jordan, Italy and the Palestinian Authority.

“Notable from their absence here are Syria and Turkey and it could well be that further energy cooperation and agreements of frameworks is a means of excluding these states from further regional integration.”

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