CAIRO: Negotiations over the natural gas deal between Egypt and Israel dragged out over 10 years because of “political concerns in Egypt," a recently revealed Wikileaks cable said.
A partial extract from cable number 05CAIRO4972 of a confidential document prepared by the US embassy in Cairo one day before the deal was signed said the US described the deal as "the most lucrative ever."
On July 1, 2005, then Egyptian Petroleum Minister Sameh Fahmy and Israeli Minister of National Infrastructure Benjamin Ben-Eliezer signed the agreement to supply 1.7 billion cubic meters of natural gas annually to the Israel Electric Corporation (IEC) starting October 2006.
According to the cable, Geogas had tried to distance itself from political complications earlier in 2000 by encouraging the formation the Egyptian Eastern Mediterranean Gas as a joint venture owned by Israeli businessman Yossi Mieman’s Merhav Group (25 percent), Egyptian businessman now fugitive in Spain Hussein Salem (65 percent) and the Egyptian Gas Holding Company (10 percent).
Political forces and activists have repeatedly accused the former regime of squandering Egypt’s resources for the sake of an “enemy state,” and launched a long legal battle against the petroleum ministry.
The legal battle ended with the Supreme Administrative Court authorizing the sale of gas to Israel in February 2010, while adding that the government should monitor the prices and the quantity of its exports.
Salem, ousted president Hosni Mubarak, Fahmy and six senior energy officials are currently facing trial over corruption charges including the facilitation of gas exports to Israel. Salem is being tried in absentia.
They are facing charges of "committing the crimes of harming the country’s interests, squandering public funds and enabling others to make financial profits through selling and exporting the Egyptian gas to Israel at a low price below international market rates at the time of the contract."
After Fahmy and the six officials were detained in April, a prosecutor general statement said the deal in question caused Egypt losses worth more than $714 million.
Having a private company negotiate with the Israel Electric Corporation made the arrangement more palatable for the Geogas, the leaked document said.
The parties concluded an agreement in principle in early summer 2004 and concluded a framework agreement in February 2005.
Earlier this year, Egyptian Petroleum Minister Abdullah Ghorab said talks were underway to adjust gas contracts — especially the Israel deal.
Ghorab said media campaigns and public disapproval of gas exports were a sufficient basis for negotiating greater benefits for Egypt.
The pipeline in North Sinai that delivers gas to Israel and Jordan was attacked by unidentified gunmen five times this year.