Israel Sees Maritime Border Talks With Lebanon Starting by July

(Bloomberg) -- Israel hopes to begin talks with Lebanon as early as July to resolve a maritime border dispute that has delayed exploration in an offshore area rich in oil and gas, Israel’s energy minister said.

With no diplomatic relations, the two countries have clashed frequently over the years and Israel occupied a swath of southern Lebanon for nearly two decades. Resolving the border dispute would be a significant political achievement for the neighbors, still technically at war, and could mitigate political risk for energy companies looking to drill in a febrile region.

Yuval Steinitz said the two countries were close to agreeing on a framework for negotiation and Israel was willing to begin talks provided the Lebanese government was ready.

“I hope that we will be able to start direct negotiation, I mean direct with American mediation, in a few weeks time, but it depends on the Lebanese,” he said in an interview in Jerusalem on Monday.

Lebanon has said it was ready to demarcate and start exploiting its resources and President Michel Aoun has submitted a proposal for the mechanism to the U.S.

“Regardless of what we’re going through, it doesn’t matter to us. These are our rights. We want to get our rights back even if it was 0.001%,” the Lebanese foreign minister’s office said.

Competing Claims

Israel and Lebanon have competing claims to a maritime area close to Israel’s Leviathan gas field. The Lebanese government awarded bids to explore one of the contested blocs in 2017, over Israel’s objections, but while neighbors, including Cyprus and Egypt, exploit their newfound energy wealth, drilling in Lebanese waters has yet to begin, partly due to the lack of clarity over the border.

Steinitz said the two sides are near to agreeing that once talks are underway, international gas companies -- such as Noble Energy Inc., which is active off Israel, and Total SA -- will be able to conduct surveys in the disputed areas. That would be “an important message and confidence-building measure,” he said.

Though previous efforts to resolve the dispute have faltered, Lebanon’s government is struggling to rein in its deficit, giving a new impetus to its search for energy revenues.

The format for talks would be direct negotiations between Israeli and Lebanese representatives at the UN compound in the southern Lebanese town of Naqoura, mediated by U.S. envoy David Satterfield, he said.

The UN certified that Israel withdrew completely from southern Lebanon to the international border in May 2000, but Lebanon has challenged the demarcation in 13 places. Israel says the current talks would focus only on the maritime boundary, while Lebanese officials say the land border would also be up for discussion.

Israel media reported that one sticking point is Israel’s desire to set a six-month deadline for talks, while Lebanon wants an open-ended process. Steinitz said the time frame won’t be an obstacle.

He noted Lebanon’s newfound willingness to talk, and said the militant Islamist group Hezbollah, which is the main powerbroker in Lebanon’s government, isn’t creating barriers. Hezbollah was formed in the 1980s, partly to resist Israeli incursions in Lebanon. The two sides fought a war in 2006 and tensions remain high along the border.

“Currently it seems that there’s a general agreement within Lebanon that they can, and should, and must move forward, but you can never tell -- we will have to wait and see," Steinitz said.

Steinitz addressed a number of other topics in the interview:

• Turkey’s search for gas in waters claimed by Cyprus is viewed with concern, even though it doesn’t directly affect Israel, he said. “It’s better not to have tension in the eastern Mediterranean”
• He expects gas production from Israel’s Leviathan reservoir to begin in November
• A tender for exploring off Israel’s coast is on track to close in July after some companies asked for another month to review new, “more promising” geological data
• The East Mediterranean Gas Forum, a joint effort of Israel, Egypt, the Palestinian Authority, Greece, Italy, Cyprus and Jordan, will probably have its next meeting in Cairo in late July. Steinitz is hopeful U.S. Energy Secretary Rick Perry will visit Israel before the meeting and potentially participate in the forum
• He’s had discussions with the Americans leading White House peace efforts -- like Jared Kushner and Jason Greenblatt -- about energy issues such as exporting gas to the Palestinian Authority or developing gas resources off the Gaza coast

--With assistance from Dana Khraiche.

To contact the reporter on this story: Ivan Levingston in Tel Aviv at ilevingston@bloomberg.net

To contact the editors responsible for this story: Lin Noueihed at lnoueihed@bloomberg.net, Michael S. Arnold

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