Vivian Lewis Blog | Middle East Peace Stocks | Talkmarkets
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Vivian Lewis is editor and founder of Global-Investing.com, the daily blog newsletter for Americans and others seeking to internationalize their portfolios. She brings unique experience and competence to the business of picking foreign stocks.

After graduating from Harvard magna cum ... more

Middle East Peace Stocks

Date: Monday, June 25, 2018 3:53 PM EDT

As promised yesterday, here is my Israeli peace play stock, thanks to the plan of the Gaza Strip and West Bank Palestinians getting together to develop an offshore gas field in Gazan waters 25 miles offshore. It can be brought on by an international driller to replace British Gas (bought by Royal Dutch Shell after the “Marine” find was confirmed in 2000). The gas will be used in energy-short Gaza which suffers frequent blackouts and also piped to Jenin in the West Bank. Drilling will use the Yam Tethys platform abandoned by Delek Group, and will be financed by the Palestinian Authority and the Khoury family of Lebanon, who run CCC, a long-term partners of BG.

Delek, controlled by Yitzchak Tshuva, a Mizrahi Israeli (whose family from Libya spoke Arabic) already runs a pipeline across the West Bank to Jordan. Tshuva has taken the lead is spreading the wealth from the Israeli offshore finds to Jordan and Egypt (for on-shipping to European markets from the Nile Delta). Delek with its US minority partner Noble Energy of Texas contracted in 2014 to supply gas from the Israeli Leviathan field to the PA for power stations on the West Bank for $1.2 bn but it was canceled the next year.

If the Palestinians set their royalty on the gas at 12.5%, the Israeli level, the PA could earn as much as $2.7 bn over the next 25 years. Meanwhile the costs of bringing the gas on-stream might be under $1 bn if Israeli infrastructure is used. It will also save the Gaza's about $55 mn per year to buy diesel fuel. Palestinian power now comes mostly from Israel Electric Co which turned down gas from Marine because BG wanted to much money for it. The IEC has now agreed to leave it to the PA to charge Palestinians for their electric bills in part because the Israeli ute was owed NIS 2 bn it could not collect. The PA has agreed to pay back what it owes now and what will be owed in the future.

This comes from a report by the World Bank which was covered Sunday by the Israeli business website Globes Israel. Because we write about foreign stocks my readers are more likely to buy Delek Group, DGRLY. But you can also buy Noble Energy stock, NBL, which cratered over 3.5% today over fear of tariff wars.UBS of Switzerland rates it a buy with a $40 target price. It is under $35 now and yields 1.25%. It will report Aug. 3.

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