June 19 (Bloomberg) -- Israel will cap exports of its natural gas resources at 40 percent, Prime Minister Benjamin Netanyahu said, scaling back under public and political pressure the amount a government-appointed panel recommended.
“This amount of gas will satisfy our gas needs for at least the next 25 years,” Netanyahu said today at a Jerusalem press conference. “We are talking about a decision that balances our need to ensure an affordable energy source for the Israeli public with the need for gas exports to produce revenue that will be invested for the public’s needs and security.”
The government committee had recommended last year that Israel allow about 50 percent of its gas resources for export. Lawmakers and public interest groups protested the panel’s proposals, with some opposing any gas exports, saying they would enrich energy companies instead of benefiting the country by lowering prices.
Exploration companies have discovered about 900 billion cubic meters of gas since 2009 in two fields off Israel’s Mediterranean coast. The partners in those fields include Houston, Texas-based Noble Energy Inc., and Israeli companies Delek Drilling Ltd., Ratio Oil Exploration Ltd., Avner Oil & Gas Ltd. and Isramco Negev 2 LP.
Israel’s TA-Oil & Gas Index of shares jumped to the highest level since April 2 at the close in Tel Aviv, compared with a 0.4 percent decline of the benchmark TA-25 index.
The announcement “reduces uncertainty about the country’s export policy and will benefit the gas explorers who can now progress toward exports,” said Guil Bashan, an analyst at IBI-Israel Brokerage & Investments Ltd. in Tel Aviv.
Uri Aldubi, chairman of the Association of Oil and Gas Exploration industries in Israel, said in an e-mailed statement today that the government should adopt the recommendations of the panel it appointed.
Energy Minister Silvan Shalom, who had lobbied to trim the amount for export, said at the news conference that today’s decision will benefit Israeli consumers. Increasing the amount of gas reserved for domestic use will eventually lower local prices, he said, along with those of gas-powered electricity and water systems.
Netanyahu’s Cabinet will vote on today’s decision at its weekly meeting on Sunday, government spokesman Liran Dan said.
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