The Leviathan field and the war in Gaza

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The Leviathan field and the war in Gaza

Oscar Ugarteche[1], OBELA[2]

The onshore and offshore gas and oil fields discovered in Egypt in the 1990s convinced Israeli businessman Gideon Tadmor to start drilling for gas or oil. His company, Avner Oil and Gas, later became part of the Delek Group, and they realised they needed expertise for such depths. The small Samedan Oil Corporation provided that expertise and joined the project. In 1999, they drilled their first well, and by 2000, it was producing. It took 10 years to find the Tamar field, about 90 km off the coast of Haifa, which began producing gas in March this year. The following year, they found the Leviathan field with 17 trillion cubic feet (Tcf) 50 km southwest of Tamar. In total, six discoveries were made in Israeli and Palestinian waters, with a total of approximately 36 Tcf of gross resources. Since, that has grown to 600 Tcf. Part of the problem is that Leviathan is partially on Palestinian land, specifically off the coast of the Gaza Strip and beneath it. Widespread analyses of Gaza refer to the problem of Israeli expansion into Palestinian territories and the violence of Hamas-led Palestinians against Israelis. The most recent ones are about the so-called genocide in the UN General Assembly. This text will explore, from an economic angle, the issue of fossil fuel deposits in Gaza and their possible relationship to the conflict in the Strip specifically.

A Long-standing Problem.

The development of the Gaza Marine gas field, within a small triangle of water located about 30 km off the coast of the Gaza Strip and therefore within Palestinian waters, was paralysed shortly after its discovery in the late 1990s due to disputes over Israel's refusal to pay market prices for surplus gas to the Gaza Strip authorities, Hamas; and concerns about the drift of revenues that could be received by those authorities. Hamas, created in 1987 during the First Intifada against Israeli occupation, was involved in various violent incidents within Israel in the 1980s and 1990s and more recently on 7 October 2023. It was created in part with the support of the Israeli government to divide the Palestine Liberation Organisation (PLO), then led by Yasser Arafat. Strictly speaking, it is an organisation derived from the Egyptian Muslim Brotherhood movement, active in the Gaza Strip since the 1950s. For these reasons, the Israeli government did not want to spend money despite having gas on the coast. The threat to Israel's peace was clear.

In 2011 an article in the New Atlanticist by Alexandros Petersen stated that “The Israelis recognize a clear risk that the Palestinian people will make a claim on the gas, adding further complication to an already intractable-seeming conflict.” (https://www.atlanticcouncil.org/blogs/new-atlanticist/leviathan-in-the-levant/). Two years later, Nikki Jones wrote in GeoExPRO on 9 December 2013 that "the conflict between Israel and the Palestinian Authority is likely to be exacerbated. The exploitation of the Gaza Marine gas field, about 30 km off the coast and therefore in Palestinian waters, has been on hold since the late 1990s, mainly due to disputes over Israel's refusal to pay market prices for surplus gas and concerns about revenues going to the Hamas government." She adds, "given the wide variety of actors and complicated dynamics in the eastern Mediterranean, the ultimate scope of exploitation of the Levantine basin is unknown. In the meantime, it unfortunately seems more likely that the discovery of hydrocarbons will fuel tensions rather than bring peace to this conflict-ridden region." (Nikki Jones, “The Levantine Basin: Prospects and Pitfalls”. https://geoexpro.com/the-levantine-basin-prospects-and-pitfalls/decembere 9, 2013) Nevertheless, exploration and initial exploitation began elsewhere within Leviathan.

The launch of Leviathan and its pitfalls

On 28 August 2019, the UNCTAD report "The economic cost of the occupation for the Palestinian people: The unrealised potential of oil and natural gas" (https://unctad.org/publication/economic-costs-israeli-occupation-palesti...) confirmed that the Occupied Palestinian Territories (OPT) harbour significant reserves of oil and natural gas in Area C of the West Bank and off the Mediterranean coast of the Gaza Strip. New discoveries of natural gas in the Levant Basin are estimated at 122 trillion cubic feet, while recoverable oil is estimated at 1.7 billion barrels. The report states that "this offers an opportunity to distribute and share some $524 billion among the various parties in the region and promote peace and cooperation between the former belligerents."

Nevertheless, the Leviathan field was developed by Chevron and Israel in 2019 and began supplying Israel and Egypt shortly after production began in 2020. The field is operated by Chevron, which owns a 40% stake in it, together with NewMed (45.34%) and Ratio of Israel, and also supplies Jordan. Egypt wanted to resume negotiations on Gaza Marine with Israel that year, but they were stalled because, for the latter, the resources would be used to finance the Hamas government, which is its declared enemy. However, in 2022, Egypt and Israel resumed negotiations. In June 2023, Israel approved the development of Gaza Marine and facilitated the completion of negotiations with Egypt, which could also benefit the Palestinian Authority (PA) in terms of export revenues and energy independence. Egypt is sponsoring the project, and most of the gas will be sold to the Egyptian energy sector (and perhaps also exported to Europe in the form of Liquefied Natural Gas). Leviathan, off the Mediterranean coast of Israel, now has proven reserves of some 600 billion cubic metres, of which it will sell some 130 billion cubic metres of gas to the country on the Nile until 2040, or until all quantities in the contract are fulfilled.

However, Rettig and Spanier (The Journal of World Energy Law & Business, Volume 17, Issue 2, April 2024, Pages 128–135, https://doi.org/10.1093/jwelb/jwad039) state that the legal status of the field is unclear, although Israel has not filed any legal claims on Gaza Marine. It should be remembered that, although the Palestinian Authority considers itself the legitimate owner of the field, since 2007 it has had no effective control over the Gaza coast or waters, which weakens its claim. In other words, Israel negotiated what is in Palestinian waters in a territory that is controlled by Hamas on land. The final buyers of this gas, in addition to Israel and Egypt, will be European countries via Egypt, which has two gas processing plants.

Egypt's agreements with Israel to purchase this gas

In August 2023, Egypt and Israel signed an agreement on the field. A month later, in September 2023, Netanyahu announced at the United Nations General Assembly the construction of a gas pipeline that would come from India and end in Europe via Cyprus. To make this possible, he was about to sign a peace agreement with Saudi Arabia in October 2023. The gas pipeline from India would pass through Saudi Arabia and exit at the Israeli coast. It is possible that the idea was to connect Leviathan gas to these pipelines as well. In October 2023, Hamas carried out a fierce attack and massacre in Israel, and negotiations were suspended. Egypt remained within the agreement.

Map 1

Location of the area where gas is currently being extracted

Source: https://www.energyandcapital.com/hamas-stalls-israels-leviathon/

This event triggered what appears to be genocide against the Palestinians, including the annihilation of life in Gaza City, with the destruction of hospitals, schools and the eradication of all possible forms of life. In this scenario, Egypt did not open its border crossings to the Palestinians so they could leave, thus allowing the massacre to take place. The question is whether the Gaza Strip and Gaza City are only a military target or whether Gaza Marine (inside the Palestinian Gaza sea triangle opposite the Gaza Strip) is an important variable in "finishing the job" and completing control of the gas in the Leviathan basin. After all, the Leviathan field extends from the sea to land in areas that have not yet been explored and are under the control of Hamas and the Palestinian Authority (see yellow circle on map 2). For both Hamas and the Palestinian Authority, handing over these fields means giving up on having a state in the future.

Map 2

Levante field assessment area

Source: https://www.offshore-technology.com/projects/leviathan-gas-field-levanti...

On 7 August 2025, in the midst of the genocide in Gaza, Egypt signed a new gas agreement with Israel worth a record $35 billion, almost tripling its gas imports from Leviathan and representing the largest export agreement in Israel's history. However, following Israel's attack on Qatar on 9 September, it is currently on hold.

The reason that prompted the country of the Pharaohs to sign an initial agreement is that gas production fell by more than 42% in less than five years, from 6.133 billion cubic metres in March 2021 to 3.545 billion cubic metres in May 2025, according to the Joint Organisations Data Initiative (JODI). The expansion of Leviathan will cost around $2.4 billion and will enable production and supply within Israel, Egypt and others until 2064, according to NewMed.

In short: this is a different interpretation of the inaction in the face of the horrors in Gaza, which is the interests created by this field, which on the one hand has neutralised Egypt, and on the other seems to have stunned European countries that have allowed the scaffolding of the United Nations system, created in 1945 to prevent another genocide, to be destroyed through this crime. What in many interpretations is a conflict between Palestinians and Israelis for biblical reasons could well be a dispute over who controls the fossil deposits and how the revenues are distributed. Now that the Palestinian State has been recognised by several European countries, despite having almost no physical territory left, oil and gas revenues would give them breathing space and the possibility of regaining lost ground both in the Gaza Strip itself and on the left bank.

Sources used:

[1] Investigador titular Instituto de Investigaciones Económicas UNAM, SNI III. Coordinador OBELA

[2] Dr. Jose Carlos Diaz Silva (webmaster-OBELA), Lic. Gabriela Ramírez, Jennifer Montoya, Carlos Madrid, Jesús Córdoba

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Tema de investigación:

Crisis económica