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Tuesday, 27 February 2018

Israel denies it is making concessions on the int’l arbitration award against Egypt

Israel denies it is making concessions on the int’l gas arbitration award against Egypt—have the two sides agreed just to gloss over it? Senior Israeli officials have denied that last week’s pact to export USD 15 bn worth of natural gas to Egypt included an agreement to squash a USD 1.76 bn international arbitration from a pre-revolution contract to sell natural gas o Israel, Haaretz reports. “Israel hasn’t given up on the debt and the matter did not come up for discussion during talks on the Leviathan export deal to Egypt that was signed [last] week,” Israel’s Ministry of Energy said. Israel Electric Corporation, the beneficiary of the 2015 arbitration award, also denied that such a concession was made. “The company is not aware of any concessions on the debt. There won’t be any backing down on the debt. The company continues to seek to collect it,” IEC said in a statement. As we noted on Sunday, the Prime Minister Sherif Ismail seemed to suggest that the agreement, which would see Alaa Arafa’s Dolphinus Holding import gas from Israel’s Delek and Noble, part of a compromise to withdraw the USD 1.76 bn international arbitration ruling against EGAS, EGPC and East Mediterranean Gas (EMG). Ismail had made dropping the arbitration award a condition to allowing imports of gas from Israel’s Leviathan field.

Maybe the arbitration isn’t really that important to Israel? A senior Israeli government source, who asked not to be identified, told Haaretz’s TheMarker that he didn’t expect Egypt would agree to pay the debt and that Egypt’s failure to pay the compensation wouldn’t affect electricity rates in Israel since IEC had already written off the debt as unrecoverable and had incorporated it into rates over the last six years. That, coupled with the fanfare from the announcement of the agreement, would hint that formal settlement of the issue may not be as essential as both governments are letting on.

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