Israel sets deadline in gas dispute with Cyprus

Israeli Energy Minister Karine Elharrar has told companies in her country they have until next month to settle a gas dispute with Cyprus, otherwise the states will step in to put an end to the prolonged discussion between the two neighbors.

According to Israeli media, Elharrar responded in writing to Nammax Oil and Gas Ltd last week, warning that if the companies fail to reach an agreement by March 4, “the negotiations will once again be led by the states.”

Last year Cypriot energy minister Natasa Pilides said she and her Israeli counterpart at the time, Yuval Steinitz, had agreed upon a framework to resolve pending issues on regulating rights on the “Aphrodite” and “Yishai” reservoirs as Cyprus was moving forward with unilateral development plans.

But Elharrar wrote in her letter that “Israel never gave up on its rights to the Yishai Reservoir, including the demand that the reservoir not be opened unilaterally.”

“This stance has been made clear to all sides a number of times on different occasions,” the Israeli minister wrote.

Cyprus and Israel have been involved in a long dispute over the development of the Aphrodite-Yishai gas field in the Mediterranean, with some 10% claimed by Israel.

Pilides said she and Steinitz had agreed upon a framework to resolve the issue, adding that guidelines for negotiations would be passed on to the companies involved in the project.

Greek Cypriots have been arguing that Aphrodite’s unilateral development was not tied to a special agreement on the issue, but it was not until last year that a deal would provide for Israel to get compensation for giving up its rights.

But Elharrar’s response prompted public statements from stakeholders, with Nammax saying this was the first time in a decade that an energy minister took an official position on the matter.

Although never officially stated, reports last year said the Israeli partners preferred joint development with Aphrodite partners Chevron, Shell and Delek, instead of a buyout in the form of a one-time compensation payment.

The Yishai holding group said it was satisfied with Elharrar’s response, saying that up until now “Israel dragged its feet and for unclear reasons surrendered to the whims of Cyprus despite a signed accord between the countries.”

“As long as Israel is willing to accept the demands of Cyprus and its partners and give up on all of its rights and assets in the reservoir... Israel should at least get appropriate and respectable compensation... The development of Aphrodite is a fact on the ground, and the minister is doing the right thing in standing up for the Israeli public’s rights,” the group said.