Israel loads first crude oil shipment from contested oil field

Four months after the maritime border agreement was signed between Lebanon and Israel, the first ever crude oil shipment was loaded yesterday for export from the Karish gas field in the Eastern Mediterranean. Energean’s Power Floating Production Storage and Offloading unit has been used to develop the field.

Discovered in 2013, the relatively small Karish field, together with the nearby Tarin field, is estimated to hold as much as 2-3 trillion cubic feet of natural gas and 44 million barrels of oil. Energean, a London-based hydrocarbon company, has the contract to develop Karish.

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Rights to the field were contested by Lebanon and Israel. As recently as last July, Israel shot down three drones believed to have been launched towards Energean’s facility by Hezbollah. The extraction of gas from the contested waters before the conclusion of any deal was seen by the Lebanese group as a “red line”.

A maritime border deal was finally agreed in October. Under its terms, Israel retains full rights to develop the Karish field while Lebanon retains full rights in nearby Qana. As Qana extends southward across a border known as Line 23, Israel will be entitled to a share of royalties through a side agreement with the operator, the French company Total. Hezbollah is on board with the agreement, seeing it as a potential way out of Lebanon’s ongoing economic crisis.

According to the Financial Times, the crude loading yesterday was still deemed sensitive enough to require some additional security measures. Apparently the Seliger Aframax tanker, capable of carrying about 700,000 barrels of crude, was visible on satellite tracking next to the Energean Power FPSO late on Sunday evening but then turned off its tracking device. This was done for security reasons, explained one person familiar with the operation.

A week after the maritime agreement, Israeli Prime Minister Benjamin Netanyahu pledged during the election campaign that he would “neutralise” the deal with Lebanon. “I will behave as I did with the Oslo Accords,” Netanyahu said in an interview with Army Radio. He had described the maritime deal as “illegal”, saying that he would not be bound by it. He argued that the then Prime Minister Yair Lapid and Defence Minister Benny Gantz, “didn’t want to extract the gas in the first place, but now they want to surrender it to Hezbollah.”

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