Eni has become the first Western major to walk away from the gas off Gaza – a sign that the public mood has turned, and that the reputational price of drilling in occupied waters is finally being paid. But one retreat does not end a plunder. As the Italians slipped out, Israel sealed the largest gas export deal in its history, thirty-five billion dollars’ worth, while the one field that is genuinely Palestinian has lain untapped for a quarter of a century.
When the Italian energy major Eni notified Israel’s petroleum commissioner in October 2025 that it was walking away from a consortium bidding to drill for gas off the coast of Gaza, it did so without fanfare. There was no press release, no statement of conscience, no acknowledgement of the campaign that had pursued the company across two years and several countries. The decision surfaced only months later, buried in a corporate disclosure to the Tel Aviv Stock Exchange, and was confirmed in March 2026 when Eni’s Israeli partner, Ratio Energies, told its own investors that the Italians were gone.
For the Palestinian human rights organisations that had been demanding precisely this outcome, it was a victory, however quiet. For Eni, it was housekeeping. The truth of why a company leaves a project is rarely written down, and the gap between those two readings – principled retreat or strategic tidying – is where this story begins. Because the same eastern Mediterranean that Eni was backing out of was, at that very moment, delivering Israel the largest energy export deal in its history. The contrast is the point. It is a tale of two seas, governed by the same water and the same war, in which one party banks tens of billions while the other cannot draw a cubic metre from a field that has been proven, mapped and waiting since the turn of the century.
A quiet exit from Zone G
The acreage Eni abandoned is known to Israel’s energy ministry as Cluster G, or Zone G, a cluster of six exploration licences covering blocks 27, 28, 36, 37, 70 and 74 in the Mediterranean west of the giant Leviathan field. The licences were offered under Israel’s fourth offshore licensing round, launched in December 2022, and the winning bids were lodged months before the war. Approval, however, landed on 29 October 2023 – three weeks into Israel’s assault on Gaza – a sequence that handed the awards an unavoidable political charge. Israel’s then energy minister made a virtue of the timing, presenting the licences granted in wartime as proof that major exploration companies still trusted in the country’s resilience, even though the bids long predated the events of that month.
The original consortium was led by Eni, which held a seventy-five per cent stake and was expected to operate any field that was discovered. The Aberdeen-based Dana Petroleum, a subsidiary of the Korea National Oil Corporation, held fifteen per cent, and Israel’s Ratio Energies held the remaining ten. The geography is what made the arrangement combustible. By the reckoning of the Palestinian organisations that later challenged it, sixty-two per cent of Zone G falls within the maritime boundary that the State of Palestine declared in 2019 under the United Nations Convention on the Law of the Sea. In other words, the larger part of the acreage that Israel was licensing to a European, a Korean and an Israeli company sat in waters that Palestine claims as its own, off the coast of a territory under bombardment.
The legal challenge was methodical. In February 2024 the international law firm Foley Hoag, acting for the human rights groups Al-Haq, Al Mezan and the Palestinian Centre for Human Rights, served formal notices on all three companies, demanding they desist from any activity in the disputed portion of Zone G. The Israeli legal centre Adalah wrote separately to Israel’s energy minister and attorney general, demanding the licences be revoked and any pending tenders in Palestinian waters cancelled. The argument rested on the law of occupation: the Hague Regulations, and Article 55 in particular, prohibit an occupying power from exploiting the finite resources of occupied territory for its own commercial benefit, a prohibition the lawyers framed as a bar against pillage. Running alongside the litigation was a sustained public campaign in Italy, led by the Milan-based watchdog ReCommon, which had spent years pressing Eni to quit.
When the exit finally came, Eni gave nothing to the campaigners. The company attributed the move to a rationalisation and diversification of its upstream portfolio, and later issued a statement noting that it had not in fact received the licence and did not intend to be involved in the area in future. Italian activists and Palestinian organisations read it differently, tying the withdrawal directly to the pressure generated by the war. There is no way to adjudicate between the two accounts from the outside, and a serious reader should resist the temptation to. What is documented, and what sits awkwardly against Eni’s insistence that the decision was purely commercial, is that the company issued a cease-and-desist letter to ReCommon over statements its campaigner had made on the Italian investigative television programme Report and in the article that followed – an energy major reaching for the lawyers to silence civil-society reporting on the very withdrawal it was carrying out.
The project did not collapse with Eni’s departure; it merely shed its operator and slowed. Dana Petroleum and Ratio Energies elected to continue together and apply for the licences under a revised ownership structure, with Dana lined up to operate any discovery. As of the spring of 2026 the split of holdings between the two had not been settled, the blocks had not been formally granted, and there was no certainty they ever would be. The partners were still assessing the compensation Eni would owe for backing out. ReCommon noted, too, that Dana’s Korean parent had been preoccupied with the disruption around the Strait of Hormuz, a distraction that further stalled the restructuring. The grievance that animated the legal challenge, meanwhile, has not moved: the rights groups have stressed that Israel’s subsequent licensing round again reaches into Palestinian-claimed waters, and they continue to press every company involved to stay out.
The thirty-five billion dollar benchmark
To understand why a single company’s exit from six undeveloped blocks matters so little to the larger picture, it helps to look at what Israel’s offshore gas economy was doing in the same season. On 7 August 2025, the partners in the Leviathan field signed the largest export agreement in the country’s history, a deal valued at around thirty-five billion dollars to supply roughly 130 billion cubic metres of natural gas to Egypt through 2040. The Israeli government approved it in mid-December 2025, with Prime Minister Benjamin Netanyahu describing it in a televised address as ‘the largest gas deal in Israel’s history’ and casting it as proof of the country’s standing as a regional energy power.
The scale is difficult to overstate. The agreement, struck with the Egyptian off-taker Blue Ocean Energy, replaces an earlier export contract signed in 2019 and roughly doubles the volume committed to the Egyptian market. It is to be delivered in two stages: an initial twenty billion cubic metres from the first half of 2026, followed by a far larger 110 billion cubic metres once a major expansion of the Leviathan platform and a new pipeline to Egypt via Nitzana are complete, eventually lifting Israeli supply to Egypt to around twelve billion cubic metres a year. Leviathan itself, sitting some 130 kilometres west of Haifa in Israel’s recognised exclusive economic zone, is estimated to hold around 600 billion cubic metres of gas and is now expected to produce into the 2060s.
This is the crucial distinction the headlines tend to blur. Leviathan is not Palestinian gas. It lies in waters that are not contested, and the deal is, in the narrow legal sense, an entirely Israeli affair. What it illustrates is the asymmetry. While Palestinian organisations were fighting to keep three companies out of six undeveloped blocks off Gaza, the Israeli state was converting its own offshore reserves into a thirty-five billion dollar revenue stream, hundreds of millions of dollars of which flow to the treasury each year in royalties and taxes. The ownership of Leviathan also closes a quiet circle: the field is held by NewMed Energy, the former Delek Drilling, with just over forty-five per cent, the American major Chevron with just under forty per cent, and Ratio Energies with fifteen. Ratio is the same Israeli company that holds the residual stake in the contested Zone G consortium. The same player benefits at both ends of the map – on the licensed acreage in Palestinian-claimed waters, and on the flagship export deal in Israel’s own.
Even within Israel the deal has drawn criticism, though of a different kind. Domestic analysts have warned that the contract commits something like fifteen per cent of the country’s proven reserves – close to a decade of domestic consumption – and risks depleting Leviathan more quickly than is prudent, raising the prospect of a future gas shortage and higher electricity prices for Israeli households. That is an argument about Israel’s own energy security, not about Palestinian rights, and it is worth registering precisely because it complicates the picture. The thirty-five billion dollar figure is not unambiguously a triumph even on its own terms. But set beside the Palestinian fields that cannot be touched, the comparison writes itself.
A field that has waited twenty-five years
The gas that can most accurately be called Palestine’s lies in a modest field called Gaza Marine, around thirty-six kilometres off Gaza City, in roughly 600 metres of water. It was discovered in 2000, when the British Gas Group drilled two wells under a twenty-five-year licence granted the previous year by the Palestinian Authority, with security clearance from the Israeli prime minister Ehud Barak. The reserves are not enormous by regional standards – estimates run from around one trillion cubic feet to 1.4 trillion, or roughly thirty billion cubic metres – but they comfortably exceed the energy needs of Gaza and the West Bank combined, with a surplus to export. The field sits within the maritime zone allocated to the Palestinian Authority under the Oslo framework, which granted jurisdiction up to twenty nautical miles offshore.
Gaza Marine has never produced a single unit of gas. The reasons are a study in deadlock. When the concession was awarded, the unspoken precondition was that surplus gas would be sold to Israel, but Israel proved unwilling to pay market price, and negotiations stalled. The Israeli prime minister Ariel Sharon vetoed an early purchase deal, reversed himself in 2002 after intervention from the British prime minister Tony Blair, then reversed again in 2003, citing concern that revenues might reach the Palestinian Authority. British Gas withdrew from talks with Israel at the end of 2007. By then the Hamas takeover of Gaza had introduced a further, perhaps fatal, complication: with Hamas controlling the coast, the Palestinian Authority claiming the rights, and neither recognised by Israel as a partner it would deal with, no party could assemble the full set of permissions needed to develop the field.
The ownership has shifted over the years without unlocking it. When Shell acquired British Gas in 2016, it inherited the Gaza Marine stake, only to relinquish it in 2018, transferring the interest to Palestinian entities. The structure that emerged placed the Palestine Investment Fund and the Consolidated Contractors Company on twenty-seven and a half per cent each, with the remaining share earmarked for Egypt’s state gas company, EGAS, and an international operator. In February 2021 the Palestinian licence-holders signed a memorandum of understanding with EGAS that would have allowed the gas to be piped to Egypt. And in an unexpected breakthrough in the summer of 2023, Israel granted preliminary approval for the field’s development for the first time since the Hamas takeover, the product of a year of quiet diplomacy involving Israel, the Palestinian Authority and Cairo. Within months the war broke out, and every development on that front stopped.
The cost of this paralysis has been counted. In a 2019 study, the United Nations Conference on Trade and Development estimated that by 2018 the Palestinians had already lost in the region of 2.57 billion dollars through being prevented from exploiting Marine 1 and Marine 2, against a field value it put at around 4.6 billion. Subsequent estimates have suggested potential revenues of a similar order. It is not Qatari money. But, as one expert involved in the project observed, it would be independent income rather than the foreign aid on which the Palestinian economy continues to depend.
Here a note of restraint is owed, because the field’s significance has been routinely inflated in both directions. In the early weeks of the war a strain of commentary held that the assault on Gaza was in some sense a campaign for control of its gas. That argument does not survive contact with the evidence. It disregards the decades of Palestinian grievance that preceded the October 2023 attack and the Israeli determination to respond to it, and it blows a mid-sized gas field out of all proportion. The American official Amos Hochstein, who discussed Gaza Marine’s potential role in Palestinian reconstruction during a visit to Israel in November 2023, put the matter plainly: one should not exaggerate its potential, but it could absolutely become a revenue stream for a Palestinian government. The field is not a motive for war. It is, more soberly, a measure of what occupation has cost – an asset proven feasible by its own developers two decades ago, and never permitted to function.
The architecture of ‘no man’s water’
What binds these three strands together – Eni’s contested blocks, Israel’s thirty-five billion dollar export deal, and Gaza’s idle field – is a single, contested question of law: who holds sovereign rights over the waters off the Palestinian coast, and what may be done with the resources beneath them. The Palestinian organisations’ answer is unequivocal. Israel is the occupying power in Gaza; it exercises effective control over the territory’s maritime areas; and under the law of occupation it has no authority to license, sell or deplete Palestinian resources for its own benefit or to confer permanent rights in them to corporate interests. On that reading, every company that takes a licence in Palestinian-claimed waters risks complicity in pillage, and Israel’s licensing rounds are themselves a violation of international law.
Israel’s position, and the ambiguity it exploits, runs the other way. When the American firm Noble Energy and its Israeli partner Delek went to court in 2021 to challenge the Gaza Marine licence area, the Israeli court declined to rule, treating the waters, in effect, as ‘no man’s water’ pending a final peace settlement. The reasoning turned on the limits of the Oslo framework: it granted the Palestinian Authority administrative jurisdiction and rights to fishing and economic activity, but stopped short of the full sovereignty that would normally carry exclusive rights to license and develop offshore resources. Add to this the fracture in Palestinian authority since 2007 – the Authority claiming the rights, Hamas holding the coast, neither commanding the field – and the result is a legal vacuum that has suited the party in physical control.
That vacuum may not hold indefinitely. The wave of states moving to recognise Palestinian statehood bears directly on the question, because international recognition could resolve the sovereignty deficit that has allowed Israeli courts to treat the waters as nobody’s. As one analyst of the field has argued, recognition could settle the legal uncertainty that has stalled Gaza Marine for nearly three decades. Whether recognition translates into the practical ability to drill, against a backdrop of Israeli security control and a devastated Strip, is a separate and harder question. But the legal ground is shifting under the deadlock, even as the deadlock persists.
A tale of two seas
Stand back, and the asymmetry is stark to the point of allegory. In a single stretch of the eastern Mediterranean, governed by the same maritime law and shadowed by the same war, Israel signed the largest gas export deal in its history while the contested acreage off Gaza limped on, minus one operator, and the one field that is unambiguously Palestinian sat exactly where it has sat for twenty-five years – proven, mapped, and dry.
Eni’s exit is real, and it matters. It is the first time an international major has backed away from drilling in waters that Palestine claims, and the campaigners who pursued it are right to treat it as a precedent that others might follow. But a precedent is only as strong as the gravity it works against, and the gravity here is considerable. For every Eni that withdraws from six undeveloped blocks, there is a thirty-five billion dollar deal pulling capital, infrastructure and political will in the opposite direction; and there is Ratio Energies, comfortably positioned on both. The lawyers’ notices and the watchdogs’ campaigns chip at the edges of a system whose centre of mass lies elsewhere.
The honest verdict is therefore a divided one. Something shifted when Eni left, and something shifts again each time a state recognises Palestine and narrows the legal space in which the waters can be called nobody’s. Whether those shifts ever reach the field itself – whether Gaza Marine, after a quarter of a century, is finally allowed to do the one thing it was discovered to do – will not be settled by a single corporate withdrawal. It will be settled, if it is settled at all, by who ends up holding the coast, the law and the licences when the war’s dust finally clears.