Top Israeli ministers declared the rapid development of the country’s natural gas resources a national security interest, in an attempt to end an antitrust dispute that has held up production.
The action taken Thursday by ministers with security responsibilities overrode the antitrust authority’s objection to a contested gas policy. The full cabinet will be asked to approve the decision, and then the proposed gas policy will be open to public discussion, according to a text message from Prime Minister Benjamin Netanyahu’s office.
“There is paramount importance to the swift development and expansion of the national gas fields discovered off Israel’s shores on security and diplomatic grounds,” the message read.
Israel’s failure to draft a coherent gas strategy six years after it discovered large offshore reserves has held up development of the Leviathan field, held primarily by Houston-based Noble Energy Inc. and Israel’s Delek Group Ltd. It has also complicated export deals and antagonized investors. Critics of the proposed policy -- including antitrust commissioner David Gilo who resigned in protest -- say it will entrench a gas monopoly.
The proposal would require Delek and Noble to sell stakes in smaller offshore fields while allowing them to maintain their hold in Leviathan, Finance Ministry budget director Amir Levi told Israel Radio on Thursday. It also would cap prices for sales to the local market until competition is in place, Levi said.
“I believe this is the dismantling of a monopoly -- not believe, I know it is -- though it’s true this is a process that will take time,” he said. “But we are creating a market here, and if we create a good enough environment, more companies will come to look for gas.”
The announcement came out after the Israeli market closed. Noble shares were up 0.9 percent at 7 p.m. Israel time.
The government says the two large fields discovered in the past six years, Leviathan and Tamar, can supply the country’s energy needs for decades, with surplus for export. Until regulatory issues are resolved, the expansion of Tamar and development of Leviathan have been suspended.
Opposition lawmakers and civic groups want lower prices for the domestic market. “The course that’s shaping up doesn’t bring a single benefit -- not a single one -- to the public,” Shelly Yachimovich from the Labor party told Army Radio.
Earlier this week, the Movement for Quality Government in Israel petitioned the High Court of Justice to block the gas plan.
The regulatory uncertainty has thrown into limbo gas export agreements with Egypt and Jordan, the two Arab countries with which Israel has peace treaties. Failure to advance these agreements would hurt Israeli strategically, according to a government official who spoke on condition of anonymity because he wasn’t authorized to speak on the record.