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Netanyahu signs off on protracted natural gas deal
Israel’s Prime Minister Benjamin Netanyahu, in his capacity as Economy Minister, yesterday paved the way for the implementation of a controversial agreement between the state and major investors over Israel’s nascent natural gas industry.
The Leviathan and Tamar off-shore natural gas fields are thought to contain around 800 billion cubic metres in gas, enough to supply the Israeli market for a century. Israeli company Delek Drilling and American firm Noble Energy hold controlling stakes in both fields and have been largely responsible for their development so far, which has generated a deal to supply gas to Jordan, with others in the pipeline.
However, in December 2014, Israel’s Antitrust Regulator, David Gilo recommended ending Noble and Delek’s dominance. Eventually, the government came to an agreement which will see Delek and Noble relinquish some holdings in Tamar and two smaller fields. The arrangement also regulates the industry in general, including the share of profits. Regular public protests have taken place lately, accusing the government of bowing to corporate greed.
The wrangling has required Netanyahu, as Economy Minister to invoke a legal clause to circumvent the Antitrust Regulator’s recommendation, in order to implement the deal. He said that Israel’s gas reserves “potentially transform us not just into an energy power, but certainly into an important international energy force with a very great capability.”
Meanwhile, Energy Minister Yuval Steinitz said that the agreement will see, “The people of Israel … get a higher percent of the profit than the average in most western countries: About 60 percent of the profit.”
However, the agreement is set for a legal challenge. Zionist Union head Isaac Herzog said the gas deal served “interests that do not benefit the Israeli public.” He added that, “The Zionist Union faction will petition the High Court in the near future, with the goal of stopping this crooked process, in order to preserve the Israeli economy and restore the rights of the Israeli public.”Meretz chair Zahava Gal-On said that her party too would appeal to the High Court over circumventing the Antitrust Regulator.