Israeli gas company announces $15bn export deal with Egypt

A gas platform in the Mediterranean sea west of Israel’s port city of Ashdod. Delek Drilling and its US partner, Noble Energy have signed a deal to sell a total of 64 billion cubic meters of gas over a 10-year period to Egyptian company Dolphinus Holdings. (Reuters)
Updated 19 February 2018
0

Israeli gas company announces $15bn export deal with Egypt

JERUSALEM: An Israeli energy company on Monday announced a $15 billion deal to supply natural gas to Egypt, in the largest export agreement to date for Israel’s nascent natural gas industry.
Delek Drilling and its US partner, Noble Energy, signed a deal to sell a total of 64 billion cubic meters of gas over a 10-year period to Egyptian company Dolphinus Holdings.
Yossi Abu, chief executive of Delek Drilling, called the deal “great news” for both countries.
He said he expects most of the gas to be used for Egypt’s domestic market, but predicted it could pave the way for wider cooperation and help turn Egypt into an export hub for Israeli gas.
“I think that the main thing is that Egypt is becoming the real gas hub of the region,” he said.
Egypt was the first Arab country to make peace with Israel, in 1979, but past economic agreements have been controversial in Egypt, where support for the Palestinians runs high. There was no immediate comment from Egyptian officials.
The gas will be delivered from Israel’s Tamar gas field, which is already operational, and the larger “Leviathan” field, which is set to go online in late 2019. The gas is expected to begin flowing late next year.
Several routes for shipping the gas are under consideration, with an existing pipeline between Jordan and Egypt a strong contender, Abu said. Israel already delivers gas to Jordan.
Israel has been developing natural gas fields off its Mediterranean coast for the past decade. In 2016, Delek and Noble signed Israel’s first export agreement, reaching a $10 billion, 15-year deal to provide 45 billion cubic meters of gas to Jordan.
The gas deals reflect Israel’s shared strategic interests with Jordan and Egypt, both of which are important US allies.
Israel maintains quiet security ties with both countries, particularly Egypt, which is battling an Islamic militant insurgency in its Sinai desert, near the Israeli border.
Israeli Energy Minister Yuval Steinitz called the deal a “very important milestone.”
“It is the first time since the signing of the peace agreements with Egypt and Jordan that there are big, significant, serious export deals between Israel and the Arab world,” he told Army Radio.
Prime Minister Benjamin Netanyahu hailed what he called “the historic agreement,” saying it would provide billions of dollars to state coffers as well.
Netanyahu said the deal validated his government’s controversial 2016 agreement with the Delek consortium to develop Israel’s gas fields. Critics, including opposition lawmakers, complained it was skewed in favor of the companies.
“This is a joyous day,” he said.


Davos 2019: Mideast CEOs turn gloomy on global economy, PwC study finds

Political and business leaders are gathering in the mountain resort of Davos in Switzerland this week. (AP)
Updated 4 min 8 sec ago
0

Davos 2019: Mideast CEOs turn gloomy on global economy, PwC study finds

  • The loss of confidence from regional CEOs was the second biggest fall in the world, beaten only by North American bosses, whose optimism fell from 63 percent to 37 percent

DAVOS: Chief executives in the Middle East are much less confident on prospects for the global economy than they were in 2018, according to a report from accounting and consulting group PwC.

The firm’s annual survey of top bosses’ attitudes, traditionally launched on the eve of the World Economic Forum Annual Meeting in Davos, showed a big drop in the number of CEOs from the region who believe global economic growth will improve in the next 12 months.

Only 28 percent of Middle East business leaders now see an improvement in economic prospects, compared with 52 percent this time last year. Bob Moritz, global chairman of PwC, said: “The prevailing sentiment this year is one of caution in the face of increasing uncertainty.”

The loss of confidence from regional CEOs was the second biggest fall in the world, beaten only by North American bosses, whose optimism fell from 63 percent to 37 percent.

PwC said that the Middle East decline was due to “increased regional economic uncertainty,” while the North American fall was “likely due to the fading of fiscal stimulus and emerging trade tensions.”

The results of the PwC poll - conducted among 1,300 business leaders around the world - reflected an overall decline in business confidence in each region surveyed. Last year, only 5 percent of CEOs said that global economic growth would decline. For 2019, this has jumped to nearly 30 percent.

Globally, confidence in CEOs’ own companies to grow revenue this year has also fallen sharply. Moritz said: “With the rise in trade tension and protectionism it stands to reason that confidence is waning.”

The US retains its lead as the top market for growth among international investors, but many CEOs are turning to other markets, or investing at home. The ongoing trade conflict between the US and China has resulted in a sharp decline in the number of Chinese bosses chosing the US as a market for growth, down from 59 percent last year to only 17 percent for 2019.

Globally, CEOs are still more worried about the threat of over-regulation of their businesses - named as the top concern again in 2019 - but uncertainty about policy has become a major issue too.

In the Middle East, the main concern is geopolitical uncertainty, followed by the threat of cyberattack, policy uncertainty and the speed of technological change.