Israel and Lebanon Reach a Deal to Divide Gas-Rich Offshore Waters

The FPSO Energean Power transits the Suez Canal en route to Israel's Karish field (Energean)

Published Oct 11, 2022 9:48 PM by The Maritime Executive

After years of debate, Israel and Lebanon have reached an agreement on the location of their maritime boundaries. The two nations, which do not have diplomatic relations, negotiated the terms of the deal with U.S. envoy Amos Hochstein, who shuttled back and forth to talk with each side. 

Under the final terms, Israel will keep control of the Karish gas field, which is in commissioning and about to come online. The demarcation line will hand control of the adjacent Qana gas field to Lebanon, though Israel will keep an equity stake in its development and will receive dividend payments from the Qana lease operator, TotalEnergies. 

“The final version of the offer satisfies Lebanon, meets its demands, and preserves its rights to its natural wealth,” Lebanese President Michel Aoun said in a statment. 

Both nations' governments will have to ratify the deal before it is finalized, and that process faces some uncertainty. Critics of the deal note that Hezbollah, a U.S.-designated terrorist group, is closely interwoven with the Lebanese state and could stand to benefit from the gas revenue. As a sign of the potential speed bumps ahead, former Israeli Prime Minister Benjamin Netanyahu accused Prime Minister Yair Lapid of "surrendering to Hezbollah’s blackmail” by agreeing to the deal. 

If approved by both sides, the compromise opens the way for the development of both Karish and Qana, increasing supplies for the region and opening up the potential for new exports to energy-hungry European markets. It also could be a lifeline for financially distressed Lebanon, which stands to earn billions of dollars in energy revenue.

"Energy — particularly in the Eastern Mediterranean — should serve as the tool for cooperation, stability, security, and prosperity, not for conflict," said U.S. President Joe Biden. "The agreement announced by both governments today will provide for the development of energy fields for the benefit of both countries, setting the stage for a more stable and prosperous region."