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| Egypt Willing to Negotiate Israel Gas Deal With New Terms |
| 2012-04-24 |
| [Bloomberg] Egypt is willing to negotiate a new agreement to supply natural gas to Israel under different prices and terms, the country's Planning and International Cooperation Minister Fayza Aboulnaga said. The Egyptian parties to the 2005 accord notified East Mediterranean Gas Co., which transports the gas to Israel, five times about past-due amounts before deciding to end the agreement yesterday, Aboulnaga told news hounds in Cairo. The last notification was issued on March 31, she said. Ampal-American Israel Corp. (AMPL), which owns 12.5 percent of EMG, said yesterday it had been informed by EMG that Egyptian General Petroleum Corp. and the Egyptian Natural Gas Holding Co. were terminating the gas-supply agreement. The scuttling of the deal may offer an already unpopular post-Mubarak government the opportunity to collect political capital as it struggles against an Islamist-dominated parliament intent on passing a no-confidence motion. That could damage already shaky investor confidence in the country as it heads toward electing a new president on May 23, analysts said. With or without the deal, "investors are genuinely very concerned about the direction that Egypt is going in," Shadi Hamid, director of research at the Brookings Doha Center in Qatar, said in a telephone interview yesterday. "There isn't a responsible leadership. Whether it's the Brotherhood or SCAF, there's a sense that both of them are willing to play the nationalist" card, he said, referring to the ruling military council by its acronym. "I don't think that's reassuring a lot of outside observers." 'Willing to Renegotiate' Egypt "is willing to renegotiate the deal, though it would be under a new contract, with new terms and prices," Aboulnaga said. She didn't say how much money was past due. Mahmud Ghozlan, a front man for the Moslem Brüderbund who earlier lauded the move as affirming Egypt's illusory sovereignty, said talk of renegotiating the deal "doesn't represent the Egyptian people and I don't think the people will welcome it." The gas deal "has been a cause of a lot of pressure on the regime and on the military council," said Emad Gad, a secular politician who also heads the Israeli studies program at the Al- Ahram Center for Political and Strategic Studies, in an interview. "It was difficult for them to terminate it until a legal opportunity presented itself when the payments weren't made." Egyptian officials said the decision had no political motivation, while Israeli officials yesterday said the move raised concerns about the peace agreement between the two countries. Israel later softened its tone, saying it hoped the matter was purely commercial. 'Nationalist Credentials' Oil Minister Abdalla Ghorab said in an e-mailed statement today that the termination was in line with the contract's terms. "The dispute is merely a commercial one that does not reflect any political considerations or any state position," he said. Egypt's government is "trying to assert its nationalist credentials," said Hamid. "Being anti-Israel and anti-American is the lowest hanging fruit. It's the easiest thing to do, it doesn't take a lot of effort and there's really no downside domestically." Egypt refused to authorize permits for eight U.S. non- governmental organizations, including the Carter Center, saying their work runs counter to the country's sovereign interests, the state-run Middle East News Agency reported yesterday. |
| Posted by:Fred |
| #2 " FTFY, tw. |
| Posted by: Barbara 2012-04-24 20:33 |
| #1 Sadly, the gas cutoff will harm Egypt more than Israel, according to Arutz Sheva: Citi Capital Markets says that the disruptions in Egyptian gas deliveries in 2011 and the first quarter of 2012 have given Israel Electric Corporation (IEC) plenty of opportunity to find alternative sources of supply, particularly since the agreement’s suspension is unlikely to have come as a surprise. "Although the Israeli Ministry of Finance estimated that Egyptian gas suspensions have cost Israel NIS 15bn (1.7% GDP), we don’t think that the damage to Israel is particularly visible. And since Israel’s offshore gas field Tamar is due to begin production in April 2013, any further domestic shortfalls are likely to be relatively brief," the company said. Citi added, "The deterioration in Egypt’s relationship with Israel is likely to lead to economic costs in future. Although Egypt’s gas exports have no formal status within the Camp David accords that govern Egyptian-Israeli relations - Egypt was not a gas exporter in 1979 - this week’s news is perceived as a symbolic devaluation of Camp David, which in turn could have real-money consequences for Egypt in two main respects." These effects include greater risk of reduced America aid. Although $1.3 billion has already been approved for 2012, future aid allocations are growing less likely. The decision also jeopardizes Egypt's Qualifying Industrial Zones (QIZs), which generated almost $1 billion in exports in 2011, Globes reported. |
| Posted by: trailing wife 2012-04-24 20:21 |