Sources close to BG Group (NYSE: BRG; LSE: BG) (British Gas) say the company will probably allow no more than three or four months in which to agree a deal with Israel for the sale of natural gas from its offshore Gaza field.
It is believed that in the event that a memorandum of understanding with the government is not signed within the next few months, BG Group will revert to its plan to sell the gas to Egypt instead. The estimated $3-4 billion gas deal has been thrown into further doubt following the break up of the Palestinian Authority and Hamas's seizure of power in the Gaza Strip.
''Globes'' has learned that BG Group executive VP & managing director, Mediterranean Basin and Africa Stuart Fysh will visit Israel next week and he and VP business Nigel Shaw are to set meet the government's negotiating team for talks that have been described as critical to the deal.
Over recent weeks BG Group has spoken of its profound disappointment at the progress of the talks on the gas deal, in view of the fact that the Israeli government has not yet discussed arrangements for the transfer of funds to the Palestinian Authority. The latter (which owns 10% of the gas field), is set to earn $100 million a year in royalties. The disagreement between the two sides centers largely around gas prices.
Published by Globes [online], Israel business news - www.globes.co.il - on July 17, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007