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June 25, 2016 / 19 Sivan, 5776

Posts Tagged ‘Noble Energy’

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

Noble Energy, Delek to Speed Up Israeli Gas Production at Leviathan

Thursday, February 25th, 2016

The developers of the mammoth Leviathan natural gas field filed an expanded development plan Wednesday with the Petroleum Supervisor at Israel’s Ministry of Infrastructure, Energy and Water Resources.

Texas-based Noble Energy Inc., Delek Group Ltd., and Delek Drilling LP now plan to speed up development to bring gas and condensates on stream by 2019, Globes reported.

There’s good reason to move as fast as possible: until the gas begins flowing, the cost of development is $5-6 billion. Still, the first estimate for what has become Israel’s largest infrastructure project was originally $6-7 billion.

Eight drilling sites are to be connected by an underground pipeline to the platform and rig where all the gas management systems will be installed. This platform will be linked to the coast by another pipeline to be built by the Israel Natural Gas Lines Company. From there, the gas will be sold to Israeli customers at home and exported to neighboring countries as well.

Production capacity will reach 21 billion cubic meters (bcm) per year in order to meet market demand. This is five bcm more than the original development plan, which capped at 16 bcm.

The annual pipeline capacity will only be 12 bcm; however there will be an additional outlet on the platform at sea, which could be used to export directly to a regional nation as needed. That outlet will also be able to handle a 12 bcm per year pipeline as well.

All the gas treatment which is to take place at sea, will be carried out in accordance with the national master plan that was approved by the relevant authorities.

Hana Levi Julian

Israel’s Leviathan Developers Ink Gas Deal With Egypt

Sunday, November 29th, 2015

Developers of the mammoth Leviathan natural gas field beneath Israel’s Mediterranean coastal waters have inked a deal with Egypt. It’s a deal that has had Israel’s government — and that of Cairo — holding their collective breath for months.

Leviathan will start pumping the natural gas to Egypt beginning in 2019 or 2020, for up to 15 years, according to the agreement. The price of the gas includes a floor price and is to be linked to the cost of Brent oil, Reuters reported.

The Leviathan developers and Egypt’s Dolphinus Holdings agreed in last week’s letter of intent to negotiate the terms on the final deal.

Natural gas will be pumped from Leviathan to the Dolphinus Holdings via an existing underwater pipeline, Dolphinus and the Leviathan developers said in a statement to the Tel Aviv Stock Exchange (TASE).

The pipeline was built nearly 10 years ago by East Mediterranean Gas (EMG) when gas was being piped from Egypt to Israel. At the time, EMG had been managing an Egyptian-Israeli gas agreement. But that deal collapsed in 2012 after unending terrorist attacks ended the flow in the gas pipeline that ran through the Sinai Peninsula.

Leviathan, which holds an estimated 622 bcm of gas, is being developed by the Texas-based Noble Energy and Delek Group through Delek Drilling and Avner Oil and Gas. Dolphinus represents Egypt’s non-governmental, industrial and commercial consumers.

“We’ve worked with Dolphinus before and we expect to reach a final agreement quickly,” Yossi Abu, CEO of Israel’s Delek Drilling told Reuters.

“The Egyptian market is thirsty for gas, both for domestic use and for their export facilities. There is a lot of room for cooperation there.”

Dolphinus already agreed earlier this year to a seven-year deal to purchase at least $1.2 billion of natural gas from the Israeli Tamar gas field.

Leviathan is located close to the Tamar field. Cyprus also has a role in some gas field development with Israel as well; the two countries share a common basic with Egypt which gas discoveries have been made.

In addition, the Italian company ENI announced in August of this year that it had discovered one of the largest gas fields in the world off Egypt’s Mediterranean coast. The reserves are estimated at about 30 trillion cubic feet of natural gas, the equivalent of about 5.2 billion barrels of oil.

Abu noted that the discoveries, together with Egypt’s cooperation, have created a natural leadership role in the region for Cairo.

“Egypt is becoming a regional hub through cooperation with the Leviathan and Tamar partners, and together with Israel and Cyprus,” he said.

According to the U.S. Geological Survey, the eastern Mediterranean contains huge gas reserves – estimated at approximately 122 trillion cubic feet.

Hana Levi Julian

Dallas Jew Trying Promotes Texans to Invest in Oil and Gas in Israel

Thursday, November 19th, 2015

Momentum is building for increased partnership between Israel and oil and gas companies in Texas, said an official from America’s Lone Star State.

“We’re trying to get Texas companies interested in the oil and gas opportunities here in Israel— not just the major E&P (exploration and production) companies, but all the supporting companies, all the services it takes to run an oil and gas industry,” Clare Freeman, president and CEO of the Texas-Israel Chamber of Commerce, told the Jerusalem Post on Tuesday at the Universal Oil & Gas Conference and Exhibition in Tel Aviv.

Freeman explained that because gas rig support services are in short supply in Israel, there could be more opportunities to partner in areas such as shipping broken parts to Texas for repair.

Houston-based Noble Energy already partners with the Israeli company Delek Group in the operation of Israel’s offshore gas fields, Tamar and Leviathan. Freeman said Noble is the ideal type of company that Israel should look to partner with because many other large companies already have relationships with Arab countries.

Freeman’s comments come after Israeli Energy Minister Yuval Steinitz recently visited Houston, the so-called “energy capital of the world,” for a series of meetings pertaining to the energy and water industries.

Michal Niddam-Wachsman, head of the Israeli government’s Houston-based Economic Mission in the U.S. Southern Region, told JNS.org earlier this month that Israel is looking for “several other Nobles” to partner with in the oil and gas space, and that Steinitz’s visit “means that we as a government want to give motivation to the local companies to invest in Israel.”

The recent resignation of Israeli Economy Minister Aryeh Deri, meanwhile, paved the way for an offshore gas deal that resolves a pricing dispute in which former Israeli antitrust commissioner David Gilo had threatened to designate the Delek-Noble partnership as a monopoly.

JNS News Service

Israel Reaches Gas Deal with Noble Energy, Delek Ltd. Group

Thursday, August 13th, 2015

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.

Hana Levi Julian

US Secy of State Kerry is Shareholder in Noble Energy’s Israeli Gas Group

Thursday, June 25th, 2015

An emerging compromise between the government and the natural gas group that discovered Israel’s offshore reservoirs is being discussed by the political-security cabinet Thursday (June 25) just as news is revealed the U.S. Secretary of State John Kerry is one of the shareholders in Noble Energy.

In a 2013 declaration of assets published on opensecrets.org, Kerry’s shares in Noble Energy totaled an estimated $500,000 to $1 million.

The revelation comes as the cabinet mulls a compromise that would eliminate the need to break up the energy group formed by Noble Energy and Delek, Ltd.

Also on the table is the issue of what will happen with gas agreements Israel has with customers in Egypt if this issue is not sorted out quickly. A regulatory quagmire has stalled the process of setting up a pipeline to supply the gas from Leviathan to the British Gas liquefaction facility at Idku, Egypt.

Last June, the Leviathan partners had signed a letter of intent with BG in a $30 billion deal to supply 105 BCM of gas to the facility for 15 years. One sixth of the reservoir’s gas field would be exported in the deal, which is designed to make its development worthwhile.

In May 2014, the Tamar partners had signed a letter of intent with Spanish company Union Fenosa, which has a gas liquefaction facility in Damietta, Egypt. The Tamar group would supply the facility in Damietta with 70 BCM over 15 years, a deal worth nearly $20 billion. Union Fenosa Fenosa would pay for a gas pipeline to connect the Tamar reservoir to the Egyptian facility.

But Israel’s infamous snarl of political red tape got in the way, and everything came to a halt.

Last December, Israel Antitrust Authority director-general Prof. David Gilo ruled the gas sector must be restructured. Israel’s Antitrust 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, negotiations with Union Fenosa stalled – and then stopped. A senior company executive told Globes the firm has continued to hold talks with the Tamar group, but said “the situation between us and the Tamar partners is complicated and difficult. The negotiations between us have reached an impasse.”

Since Egypt does not have infinite patience or time to wait for gas to supply its local economy, it is now exploring other options. According to a report by Ernst & Young, it appears likely that Royal Dutch Shell will sell gas to the British Gas liquefaction facility in Idku. Another possible option is the Aphrodite reservoir in Cyprus.

Likewise, Jordan – which also is in process of negotiating a contract to import gas from Israel – has no time to waste in obtaining affordable natural gas for her citizens. She, too, is now seeking other alternatives thanks to Israeli red tape and political games. One possibility under discussion is the Gaza marine reservoir.

If that happens, Israel’s nascent gas export industry will drown.

Last December (2014), Kerry spoke with Prime Minister Benjamin Netanyahu in an effort to help resolve the issue. At the time, State Department spokesman Jeff Rathke said in a statement, “We continue to engage and we support all parties to move forward with the natural gas deal signed between Noble Energy and entities in Jordan and Egypt. We strongly believe that these deals would enhance energy security in the region.”

Since that time, Netanyahu appointed National Economic Council chairman Eugene Kandel to try to reach a compromise solution.

The energy group has been negotiating with the government ever since. The group hopes to continue operating as is, pointing out that unless the companies can make a profit, there will be no reason for them to explore or drill.

Hana Levi Julian

Will Israel Destroy Its Own Energy Independence, Break Deal with Delek, Noble Energy?

Wednesday, December 24th, 2014

The Israeli government’s anti-trust authority is challenging the investors over the group’s monopoly in the field of natural gas development.

U.S.-based Noble Energy and Israel’s Delek group formed the partnership that discovered, explored and began drilling in the mammoth Leviathan gas field and the smaller Tamar field, both in coastal Mediterranean waters.

An original three-year agreement with Israel’s government was to allow the group to maintain control of the gas fields. They were to sell two smaller gas deposits in order to create competition in the local market.

David Gilo, who heads Israel’s Anti-Trust Authority, said on Tuesday however that he is considering backing away from the agreement.

Instead, Gilo said he may advise the government to break up the partnership in order to avoid a monopoly in the market. In response, the Tel Aviv Stock Exchange Tuesday morning suspending trading in shares of energy companies, including Delek.

Noble is threatening litigation, adding that it will “take all action necessary to protect its legal and legitimate rights.” Prospecting by other companies for offshore gas in the country has also halted out of concern over regulatory risk.

National elections that are now facing the country and the dog fighting involved has not done anything to help the situation either.

The Jewish State finds itself in the peculiar situation in which it clearly has the resources to finally become energy independence — yet appears to be on the bring of shooting itself in the foot well before it has the chance to liberate itself from its slavery to others.

Hana Levi Julian

Printed from: http://www.jewishpress.com/news/breaking-news/will-israel-destroy-its-own-natural-energy-independence-break-deal-with-delek-noble-energy/2014/12/24/

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