Israel’s Antitrust Commissioner David Gilo said he would step down from his position to protest a compromise framework on natural gas policy that he says will not lead to competition.
“My decision to step down stems from a number of reasons, but the foremost being that the government will do what it can to promote a framework on natural gas policy that I am convinced will not lead to competition in this important market,” Gilo, who has been in the post since April 2011, said in an e-mailed statement. He said his resignation would take effect at the end of August.
The development of Israel’s largest natural gas field Leviathan halted after Gilo said in December he was considering issuing a restriction of trade ruling on the partners in Leviathan, including Houston, Texas-based Noble Energy Inc. and Delek Group Ltd. An inter-ministerial panel has been negotiating a compromise natural gas policy framework with the companies ever since. The latest draft envisages Delek and Noble reducing their stakes in smaller offshore fields while leaving the partnership in Leviathan intact, a framework with which Gilo disagreed.
“I have informed the companies and the other government offices that I cannot be part of this latest framework,” Gilo said. “But it has been made clear to me in the past few days that the government will do all it can to promote it. I hope they will change their mind.”
Shares in Delek Group closed 3.4 percent on Monday to their highest since December 9 in twice the three-month average daily volume in Tel Aviv. The Tel Aviv Oil & Gas index advanced 1.3 percent to the highest since Nov. 27.
“The resignation of Gilo means that the framework that has been talked about is that which will be promoted and that is a better one for the companies than what Gilo wanted,” Noam Pincu, an analyst at Tel Aviv-based Psagot Investment House Ltd., said by phone. “This is good for the shares.”
Prime Minister Benjamin Netanyahu, speaking after Gilo’s announcement, made it clear they had not agreed on gas policy.
“While I greatly appreciate the work of the commissioner, in this case he was the only one who opposed the framework proposed by the professional bodies,” Netanyahu said at a televised meeting of the Likud party faction meeting in parliament. “Apart from him, all the panel members supported the outlines of the proposal that will enable us to benefit from this gift of nature.”
Israel’s two largest offshore natural gas fields, Leviathan and Tamar, in which Delek and Noble are the biggest shareholders, hold an estimated 32 trillion cubic feet of gas, enough to supply the country for decades and earn export revenue. The delay has pushed off supply deadlines and endangered pending export deals, including to Egypt and Jordan.
Gilo’s resignation “is a mark of shame for the government, and especially for its head,” The Movement for Quality Government in Israel said in an e-mailed statement. His resignation spells the end of chances for competition in the gas sector and the government’s campaign to protect the “oil barons” from Gilo’s stance represents a “real danger” to democracy in Israel, the group said.