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October 22, 2016 / 20 Tishri, 5777

Posts Tagged ‘Delek’

High Court Suspends Natural Gas Deal, Harming Israel’s Relations with Energy Firms

Sunday, March 27th, 2016

Israel’s Supreme Court on Sunday accepted some of the petitions against the Netanyahu government’s natural gas outline which included development and exploitation of the country’s newly discovered off-shore deposits by Texas-based Noble Energy and Israel’s Delek Group.

In a four to one vote, the justices specifically ruled against the “stability clause,” which blocks any government regulatory changes to the off-shore gas outline for the next ten years – something that Netanyahu had promised the energy companies, in order to guarantee them stability in return for their massive investments.

This clause is considered legally problematic as it obligates future governments and Knessets, without actually having been passed via legislation.

The court ruling means the entire signed deal is suspended until the Knesset has a chance to review and amend the law. The court gave the Netanyahu government one year to fix the clause, or the deal would die.

Out of all the petitions that had been submitted to the high court after the law had been approved, the court embraced most decidedly the appeal from three good government groups — Movement for Quality Government, Association for Environmental Defense, and Israel Energy Forum — who also argued against the validity of the clause 52 maneuver, which was used by Netanyahu in an elaborate process that involved firing the state regulator, handing a government minister the Interior portfolio from which he had been removed in disgrace over embezzlement, and the Prime Minister’s claiming for himself the Economy portfolio.

Clause 52 permits the economy minister to bypass the objections of the state regulator and create a de facto monopoly, for security reasons.

Many observers had been placing small bets on whether or not the Prime Minister’s complicated political circus act would land him in front of a Supreme court veto. Surprisingly, it didn’t. In the end, the court did not challenge Netanyahu’s masterful maneuvers, but by striking down the stability clause, it may still kill the deal.

The good government groups argued the PM lacked the authority to approve the gas outline; pointed to supposed deficiencies in the approval process; claimed the absence of a relevant factual basis to establish the outline; decried an assault on the rule of law; cited violation of the principle of distributive justice; claimed injury to the intergenerational justice; accused the PM of violating the public trust; said the law had a lack of proportionality; and declared it was an extremely unreasonable legislation. The only thing missing was the kitchen sink.

But the court only accepted their argument regarding the stability clause.

Still, the three judges who voted to suspend the law were adamant in their condemnation of the Netanyahu government’s lack of respect for the democratic process. Justice Esther Hayut, who is slated to become the next Chief Justice, wrote regarding the stability clause that it is the most excessive overreach by the Prime Minister, in that it ties up government’s hand for a decade against changes in regulating and taxing the natural gas exploitation.

Israel’s energy minister Yuval Steinitz (Likud) said that the Supreme Court made an “unfortunate decision” in blocking the government’s plan to develop the offshore natural gas fields, warning it could cause irreversible damage to Israel’s energy sector. “The decision’s negative consequences on the development of the gas market, on energy security, on the Israeli economy and on the lost revenue for the state of Israel and its citizens, could be very tough, and even irreversible,” Steinitz said in a statement.

At this point it is unclear whether Netanyahu would be able to fix the stability clause in the current political reality of the Knesset.

Two ministers, Galant (Kulanu) and Katz (Likud) have had to recuse themselves from the debate for reasons of a conflict of interests, as would, possibly, Finance Minister Kahlon. This leaves a tie of 59 to 59. A lot will depend on MK Avigdor Lieberman’s Israel Beiteinu opposition faction, who may not be so eager to lend a helping hand to Netanyahu. And even if the PM manages to pass an amended bill, it is to be expected that the left in the House would take it right back to the Supreme Court.

PM Netanyahu said he would find a way to overcome the damage the court’s ruling just did to Israel’s economy. But for the time being, the gas will continue to remain stuck under the sea.

David Israel

Israeli Government Again Faces Fight Over Noble-Delek Gas Outline

Monday, September 7th, 2015

Natural gas field developers Noble Energy and Delek Group (which includes Avner Oil & Gas), may eventually be forced to turn to arbitration in order to move ahead on developing the gargantuan Leviathan natural gas field to finally produce the treasure that lies within.

Snarled Israeli bureaucratic red tape combined with an epic power struggle in the government are responsible for this ever-lasting fiasco which will eventually cost the consumer billions of shekels in energy price cuts wasted at the pump and at home.

Even though the government came to an agreement with the Noble-Delek gas consortium, the deal is now being held up by … wait for it … the antitrust commissioner, still, and by default, the economy minister.

Moreover, there is still some doubt as to whether the government will be able to muster a majority in the Knesset today (Monday Sept. 7) for its proposal to transfer authority from Economy Minister Arye Deri (Shas) to the full cabinet to enact the gas deal with the Noble-Delek consortium in the coming months. If a majority looks unlikely, the issue may again be taken off the agenda as it was in July.

The fact that this is even necessary in the first place is beyond embarrassment to the nation. The question of doubt in finding a majority to pass the vote is worse.

The Knesset is being asked to vote on transferring the authority to use Article 52 of the Antitrust Law – allowing an economy minister to circumvent objections of the antitrust commissioner in the case of national security or foreign policy issues – to the government itself, since Deri, the current economy minister, is being intransigent about doing his job.

If the Knesset does not back the government’s solution to this ridiculous problem, the gas outline will be held to a standstill. No deal. Again.

One would think these firms meant to harm this country, the way some of the legislators are behaving, when the truth is, the discoveries of these gas fields were the greatest gift Noble Energy and Delek Ltd and Avner Oil could ever have given the Jewish State. How else could these companies possibly continue to function and carry out the development of the fields – which costs millions of dollars – if they cannot recover the cost of the operation and also make a profit for their own shareholders?

Not only are protesting Israeli citizens being misled about what is happening, but they are deliberately and cynically being manipulated by those who have other agendas, and whose own power struggles are getting in the way of the good of those citizens and the future of this country.

Meanwhile, the Italian Eni firm is galloping ahead to develop the mammoth Zohr gas field discovered this month off the Mediterranean coast of Egypt, as well as the smaller gas field found in the Nile Delta region.

The quicker Egypt moves and the longer Israel takes, the more likely it is that any possible business deals Noble and Delek might have had, will have disappeared by the time the government finally gets itself sorted out.

Rachel Levy

Natural Gas Discovered in Egypt’s Nile Delta; Will Israeli Gas Still Be Needed?

Wednesday, July 22nd, 2015

Natural gas waits for no bureaucracy, and consumers clamor for energy no matter what. Cairo cannot wait for Jerusalem to untangle its political squabbling and eternal red tape.

Instead, Italian energy company Eni was given the green light to search for more gas off Egypt’s Mediterranean coast, and along the Nile, according to UPI Business News.

This week, the company announced its efforts have met with success.

Italian energy company Eni said in a statement to media, “Preliminary estimates of the discovery account for a potential of 530 billion cubic feet of gas in place with upside, plus associated condensates.”

The firm signed two off-shore deep-water Mediterranean exploration agreements in January after a 2013 auction held by Cairo. The exploration follows a $5 billion framework agreement signed in March to develop Egypt’s oil and gas reserves.

The new reservoir was found in the Nooros exploration prospect in the Abu Madi West license area, about 75 miles northeast of Alexandria, according to the report. The discovery is emblematic of the company’s strategy to “focus on Egyptian assets close to existing infrastructure and with high resource potential,” Eni said in its statement.

The new discovery will go into production by September, using nearby existing gas treatment facilities, UPI reported. Eni has been operating in Egypt since 1954. The company currently has an equity production of some 210,000 barrels of oil equivalent per day.

One month ago, Emirati energy firm Dana Gas also announced plans to launch a new drilling campaign in Egypt. Under the deal, Dana will have the right to sell the government’s share of the reserves.

Israeli Energy Exports to Egypt As far back as April 2014, Israel and Egypt have been discussing a deal to export Israel’s natural gas to Cairo. Deals were already signed by Israel with Jordan and the Palestinian Authority despite the diplomatic friction with the latter.

This past February, the Noble Energy-Delek Group which owns the mammoth Israeli Leviathan gas field sent a delegation to Cairo to discuss Israeli gas export to Egypt from the offshore Tamar gas field. The gas would flow to Egypt’s Damietta LNG (liquified natural gas) plant, according to Egyptian oil ministry sources who spoke with Reuters.

The Egyptian government finalized a long-delayed deal for an LNG import terminal and has already reached an agreement to import gas from Algeria. Talks between Cairo and Russia are continuing.

Egypt is also negotiating for gas imports from the Aphrodite reservoir in Block 12 of Cyprus. The island nation recently nixed a bid to import gas from Israel’s Leviathan field for its own domestic use, due to the ongoing snarl of red tape that has been tying up industrial progress on Leviathan in general.

Noble-Delek Talks with BG in Egypt Noble-Delek group, meanwhile, is doing its best to carry on despite the Israeli penchant for bureaucracy. The group remains in talks with Britain’s British Gas (BG) Group that runs one of Egypt’s LNG plants, as well as with the Egyptian Dolphinus Group.

The consortium spent most of last year discussing the deal to build the $2.2 billion 10 billion cubic meter (bcm) sub-sea pipeline to link up with the BG facility, to be completed by 2023.

The group also signed a letter of intent with BG that states “if Leviathan is not developed on schedule, Aphrodite will supply them with the gas they need,” according to an industry source. A similar letter of intent to sell 2.5 b.cu.m. annually to Dolphinus was signed several months ago, using the Tamar field as the source for the gas. The partners said at the time the gas could flow for private industry within 2015.

Hana Levi Julian

Tel Aviv Crowd Protests Israeli Government Gas Deal

Sunday, June 28th, 2015

You know that summer has truly returned in Israel when thousands gather in Tel Aviv to protest consumer issues.

On Saturday night, the heat was on with a demonstration against the government’s latest deal to allow the Noble Energy – Delek Ltd. Group to move ahead with its development of Israel’s offshore gas fields.

Mor Gilboa, director of the Green Course environmental group and one of the organizers of the protest, contended that the deal “leaves us with exaggerated and outrageous natural gas prices that will not contribute to lowering the cost of living, to development of a strong local industry, to development of industry in the periphery, to reducing pollution.”

Zionist Union MK Professor Yossi Yona, a member of the opposition faction, added, “The current plan does not serve the public interest. [It] concentrates economic power in the hands of interested parties, among them foreign bodies, which means a strategic threat to Israel’s sovereignty.”

But on Friday before the protest, Prime Minister Binyamin Netanyahu denied allegations he was aiding and abetting the group in retaining power as a monopoly. Rather, he said, he was working to ensure the deal would bring prosperity to Israelis.

“I work for you, for the security of Israel and the welfare of all of its citizens,” Netanyahu wrote in a post on his Facebook page. He vowed in the post to keep his campaign promise to lower the cost of living using the country’s natural resources – including the natural gas that would come from the deal being negotiated with the group responsible for discovering and developing the Leviathan, Tamar and other gas fields in Israel’s Mediterranean waters.

Having discovered and begun the expensive process of developing the gas reservoirs, however, the two firms – Texas-based Noble Energy, and Israel-based Delek – have said they need to see a worthwhile return on the investment in order to continue the process.

The group was targeted last year by the Israeli Antitrust Authority for holding a monopoly on natural gas development in Israel, paralyzing the energy industry.

After months of uncertainty, Israel’s political-security cabinet put an end to the haggling on Thursday, unanimously approving a new compromise deal to allow the group to advance development of the fields.

The deal will allow the group to retain control over Leviathan, the world’s largest offshore discovery of natural gas in the past decade, among other concessions.

Hana Levi Julian

Chinese Companies Invest in Israel

Tuesday, June 23rd, 2015

A myriad Chinese firms are continuing their quest to invest in Israel, with major companies on the prowl to purchase anything for sale. As soon as a promising Israeli company appears on the block, well-heeled Chinese firms look it over. Several have already been snapped up.

Last month the Chinese government’s Bright Food Group officially signed an agreement with Israel’s Apax Partners to purchase a 56 percent stake in Tnuva Food Industries.

Mivtach-Shamir Food Industries Ltd., which owns 21 percent in the company, is still in talks to decide whether to sell to Bright Food. The kibbutz movement, which owns a 23 percent stake in Tnuva, has decided to stay out of the deal. Any side that pulls out before completion is required to pay NIS 140 million in compensation to the other party.

The dairy giant’s center of operations is to remain in Israel, according to the agreement, including its management, production and development, Globes reported. While a representative of Bright Food will serve as chairman of the Board of Directors, most of the board, as well as the CEO, management and most of the board itself is to remain Israeli as well.

“It is our intention to continue to keep Tnuva as an Israeli company,” Bright Food said in a statement, “and continue cooperating with all relevant local bodies including employees, farmers, and cattle farmers to faithfully serve the Israeli consumer.”  The deal is expected to reach completion within weeks.

Meanwhile, there are seven contenders for a major Israeli insurance company – and three of them are Chinese.

The sale of the controlling interest in the IDB Development insurance unit of Clal Insurance Enterprises Holdings Ltd. is set for mid-July. The sale requires submission of non-binding bids, which are to follow the signing of a confidentiality agreement. All seven contenders have already completed the latter requirement, which means the sale appears to be galloping along.

The firms from China include:

  • Chinese-European private equity fund XIO – which recently acquired the Israeli Lumenis Ltd. Firm;
  • Chinese insurance giant China Life; and
  • Chinese group JT Capital, headed by Li Haifeng, who has now combined forces with an unnamed Chinese insurance company.

A binding agreement was also signed yesterday (June 21) in the sale of the controlling interest in The Phoenix Holdings Ltd., owned by the Delek Group, Ltd.

That NIS 1.8 billion deal included a nine percent discount on the original value, agreed upon with Chinese investment company Fosun International Ltd.

Hana Levi Julian

Tamar Group To Sell Gas To Egypt Through Same Old Pipeline Built For Gas Exports To Israel

Thursday, March 19th, 2015

Published by Jewish Business News

A consortium of private, industrial, and commercial Egyptian companies will buy at least $1.2 billion of natural gas from Israel’s offshore Tamar field, through the very same pipeline Egypt had used to send gas to Israel.

On Wednesday, the Tamar partners announced a seven-year deal with Dolphinus Holdings, with a minimum 5 billion cubic meters of natural gas to be sold in the first three years.

But Reuters cites an energy source in Israel who said the deal is likely to be more than three times higher, as Egypt has been facing an energy crisis.

The gas will run through the underwater pipeline constructed almost 10 ago by East Mediterranean Gas (EMG), which executed the Egyptian-Israeli natural gas deal killed by the President Morsi government, and attacks on the pipeline by Salafi terrorists in the Sinai.

A lot of water ran through the River Nile since.

Texas-based Noble Energy is the field’s operator.

Chairman of Delek Drilling Yossi Abu, said the deal highlights Israel role as “an energy anchor for countries in the region” and that the deal will “radically change Israel’s geopolitical status.”

The Dolphinus deal is subject to regulatory and other approvals in Israel, Egypt and from the East Mediterranean Gas Company (EMG).

JBN / Jewish Business News

Israel is Energy Exporter in $15b Gas Deal to Jordan

Wednesday, September 3rd, 2014

Israel became an energy producer for the first time today with the closure of a deal to export natural gas to Jordan from the mammoth Leviathan gas field.

Leviathan will become Jordan’s main supplier of natural gas in the coming years. Months of discussions in the Israeli government eventually ended earlier in the year with a decision that the country would be allowed to export 40 percent of its offshore natural gas reserves.

Noble Energy Inc., Delek Group Ltd, Avner Oil and Gas LP and Delek Drilling Limited Partnership and Ratio Oil Exploration were expected to sign a $15b Memorandum of Understanding today (Sept. 3, 2014) to export natural gas for the next 15 years to Jordan.

Israeli Minister of Natural Infrastructures, Energy and Water Resources Silvan Shalom, and the U.S. State Department were both involved in the deal.

The Leviathan gas field is a large natural gas field located in the eastern Mediterranean Sea off Israel’s coastline, about 47 kilometers (29 miles) southwest of the Tamar gas field. It is located approximately 130 kilometers (81 miles) west of Haifa, in waters about 1,500 meters (4,900 feet) deep.

Hana Levi Julian

Printed from: http://www.jewishpress.com/news/breaking-news/israel-is-new-energy-producer-in-15b-leviathan-gas-deal/2014/09/03/

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