Prime Minister Binyamin Netanyahu announced Thursday the government has reached an agreement with developers of the nation’s largest natural gas field, Leviathan.
According to the agreement, there will be a ceiling on future sales to domestic firms and the consortium has committed to completing development of the gas field by 2020. It will be brought to the Cabinet for a vote on Sunday.
The agreement follows nearly a year of wrangling between regulatory agencies and the energy consortium between Texas-based Noble Energy, in which U.S. Secretary of State John Kerry also owns shares, and Israel’s Delek Ltd.
The problems began when Antitrust Authority director-general Prof. David Gilo ruled last December that the gas sector must be restructured. The Authority accused the Noble Energy – Delek Ltd. group of forming an illegal monopoly, raising red flags for others who called on the state to nationalize its gas reserves.
As a result of the regulatory quagmire that followed, numerous talks that were in process with other countries stalled – and then stopped entirely – as other firms lost patience with Israeli bureaucratic snarls.
Deals that were pending with companies in Egypt, Spain and other countries are now questionable, placing what might otherwise have been a healthy new market for Israeli natural gas possibly on indefinite hold.
As the energy group pointed out to the government at the time, unless the companies who initially discovered the fields can recover their investment and also make a profit from their work, there will be no reason for them to continue to drill or explore further.