Dirty Border Games

In mid-April, Israeli Prime Minister Benjamin Netanyahu held his first-ever cabinet session atop the mountains of the occupied Golan Heights. In his second visit in just one week to the Israeli-occupied Syrian territory, he told the world that “after 50 years, the time has come for the international community to finally recognize that the Golan Heights will remain under Israel’s sovereignty permanently.”

And as the war in Syria enters its sixth year, Israel seems to be capitalizing on the chaos.

Israel first captured the 1,200 km square mountainous terrain from Syria in 1967, formally annexing it in 1981; moves not recognized by the international community. Israel expelled over 100,000 Syrians and destroyed many of the towns and villages in that region. Today only four Druze villages remain, with a population of approximately 20,000 Syrians. There are around 22,000 Israeli settlers also living in the area.

Israel is now moving towards changing the status quo on the ground in the occupied Golan. Over the last few years, Israel has allocated large chunks of the government’s annual budget specifically towards improving the conditions for settlers in the annexed Syrian territory. In 2014, the budget allocated over $100 million to invest in Golan’s agricultural sector, and in 2015, the budget dedicated funds to increasing Israeli settlements in the area.

Throughout that period, Israel has pushed—and continues to push—many of the Syrian residents there to accept Israeli citizenship, promising them a life of stability and security they won’t find in Syria.

Oil In The Golan
What is more significant is Israel’s recent foray into the field of oil exploration in the Golan—a move many are touting as a strategic step to cement its control over the area.

In 2013, Israel granted exclusive exploratory rights to Afek Oil and Gas, an Israeli oil company—a subsidiary of the American company Genie Energy. Afek’s chairman is Efraim Eitam, a brigadier general (reserves) in the Israeli army and a settler in the occupied Golan Heights. Considered to be far-right, he has previously called for the expulsion of Israeli-Arabs, calling them a “cancer.” He is a decorated war hero for the role he played against the Syrian army in the Golan Heights in the 1973 war. Genie Energy’s shareholders include media mogul Rupert Murdoch and Jacob Rothschild; former U.S. Vice President Dick Cheney sits on the company’s advisory board.

The company was licensed by Israel to drill 10 wells across approximately 400 km square of the Golan Heights. By 2015 Afek’s chief geologist declared “potentially billions of barrels of oil” in a reservoir, which could easily supply Israel’s local consumption, but in a K-8 form filed this April, Genie Energy stated that the “preliminary findings confirmed the presence of gaseous hydrocarbons and other compounds. However, Afek did not encounter the expected levels of liquid hydrocarbons and, as a result, could not confirm the current commercial viability of the resource.”

Despite the lack of any actual oil extraction or the guarantee of commercial viability, the Israeli government extended Afek’s license to continue explorations until April 2017.

“It is important to put the Golan drilling and oil extraction project by Afek Oil and Gas in context,” says Paul Michael Wihbey, an oil and gas expert based in the U.S. “Namely, over 500 wells have been drilled [across Israel since its founding] and no economically feasible discovery has yet been made.”

“Second, even if oil should be discovered, it does not mean that the will make it to the market,” he adds, explaining that issues such as transport infrastructure, quality of the crude oil and the cost of extraction based on geological issues such as tight oil and fracking are all factors that affect and determine the operational viability and cost effectiveness of the project.

In fact, Afek’s claim in October 2015 that they made discoveries with the potential of billions of barrels has actually offered few industry specifics to validate the claim.

“Up until that point, Genie’s stock experienced a significant six month 40 percent decline. The announcement immediately spiked the stock upwards,” Wihbey reveals.

Political Impact
Israel, which covers almost all of its crude from imports, has always tried to enhance its energy security by finding a local source, ever since the late 1940s. The period of 1967-1975 was an exception as Israel was using the oil from the then occupied Egypt’s Sinai Peninsula, which covered over half of its crude needs.

While Israel has attempted to exploit oil shale in many areas over the years, especially in the Negev desert, it never tried its luck in the Golan. Even after Jordan explored the Yarmouk basin, which is immediately adjacent to the Golan, Israel did not follow up on its side; that is, until now.

Many analysts are now questioning the timing of this move, pointing out that digging for oil in the Syrian territory while Syria is preoccupied with its own vicious civil war.

“The obvious reason [this is happening now] of course is the Syrian crisis,” explains Mohammed Saleh Alftayeh, a Syrian political and military analyst.

“Syria is not in a position now to prevent Israel from exploring for, and producing, oil from the Golan Heights. It is the perfect time to gradually create a new reality in the Golan,” he adds.

“For Israel, which officially annexed the Golan Heights but not the West Bank, claiming to have found oil in the Golan would strengthen Israel’s argument that the Golan is vital to Israel and it cannot return it to Syria.

Or at least it would increase its value which would enable Israel to ask for a huge compromise from Syria in return.”

And Israel has used this strategy in previous negotiations in the past. After it captured the Sinai Peninsula from Egypt in the 1967 war, Israel started using the oil from the Ras Sudr and Abu Rudeis oilfields—totaling around 55 percent of Israel’s crude needs. During the peace negotiations mediated by the U.S. between the two countries, Israel—which considered these oil fields vital to its energy security—managed to secure $350 million in annual aid from the U.S. to cover the cost of importing oil, and got Egypt to agree to allow non-military cargoes to pass through the Suez Canal to and from Israel.

In the late 1990s in negotiations between Syria and Israel, Israel refused to return the Golan Heights citing water security as a concern. The peace process has been frozen pretty much since 2000 after Syria refused to accept Israel’s modified version of the borders.

And apparently oil has replaced water as an excuse.

“Now Israel could argue that it cannot return the Golan, even according to the borders it proposed in March 2000, as the Golan oil is vital to Israel’s energy security,” says Alftayeh. “Israel could demand huge compensations from the U.S., a huge compromise from Syria, and—if there is indeed oil—it could even demand a share of it.”

Legally Speaking
According to international public law, Israel currently has no title or claim to any oil or other natural resources in the Golan Heights.

The international law governing occupation and the international public law of permanent sovereignty to natural resources both note that the state in which the petroleum lies, in this case Syria, is the ‘owner’ of the resources, regardless of any occupation.

While annexation is a different nature this is an act whereby one country absorbs territory into its own” and thereby gains sovereignty over that territory and consequentially also ownership rights to any natural resources in that territory. Annexation has not taken place in the Golan Heights and it has not been recognized internationally as annexed.

“The occupying power cannot pillage the public property of the occupied area,” says Tonje Gormley, senior lawyer at Arntzen de Besche Advokatfirma AS, a law firm specializing in international petroleum law and contracts based in Oslo, Norway.

“It cannot legally commence new petroleum activities such as exploration or exploit any resources discovered and make them. An occupying power is under an obligation to act as an administrator in the occupied area and, with certain very limited exceptions, only safeguard the public property in the occupied territory,” she adds.

“Furthermore, the alleged annexation of the Golan Heights is not recognized internationally… Just because a country refuses to recognize or adhere to established or widely recognized international law, this does not make the international law void. The starting point from the international law on occupation is that this is still Syrian territory, and that’s it.”

This breach of international law can also have an impact on companies working on the oil project; specifically the U.S.-based Genie Energy company. “Israel has granted licenses to this company based on Israeli law, but it cannot legally do that because according to the law of occupation, Syrian law still applies, so this license is technically not legal,” she adds. “For Genie, this means they are carrying out petroleum activities where they do not have the license to do so, so in theory they can actually be sued by Syria.”

According to Alftayeh, the best course of action for Syria today would be a refusal to partake in negotiations.

“Any negotiation, with Syria in its current situation, would not provide Syria with a fair settlement.”

“If Israel wants to create a leverage by exploring for oil in the Golan, Syria should wait until it finishes its war, rebuild its capabilities, and only then can it seriously address the Golan issue,” he said. “Only time can serve Syria and ‘deplete’ Israel’s leverage.”