1. 19.5.2015 Israel softens anti­monopoly stance but new gas players still expected to flock ­ Natural Gas Daily ­ Interfax Global Energy
http://interfaxenergy.com/gasdaily/article/16124/israel­softens­anti­trust­rules­but­newcomers­still­drawn 1/2
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Israel softens anti-trust rules but newcomers still drawn
Written by
Rachel
Williamson
Posted
14 May 2015
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The new Israeli government has backed away from stringent anti-monopoly measures to break up the ownership of its
gas fields, but its latest proposal will still bring some new players into the sector.
The weaker measures – vigorously opposed by Antitrust Authority Commissioner David Gilo – require Delek Group to
sell its 30% stake in the Tamar field, although the company does not have to do so until six years after a deal is signed.
United States-based Noble Energy will also have to dilute its stake in the field from 36% to 25%, instead of to 10% as
demanded by Gilo.
This will delay the breakup of Tamar ownership until 2021 at the earliest, and some controls will remain over domestic
gas pricing as a result. Both companies must entirely sell out of the smaller Tanin and Karish fields, but there is no
change to the ownership structure of the giant Leviathan field, according to the deal negotiated by the Prime Minister’s
Office, the Ministry of Finance, and the Ministry of Energy and Water.
The new arrangement has also thrown out clauses that would have forced the Leviathan partners to individually market
the field’s gas in Israel, as well as a proposal that aimed to make Tamar competitive against its larger neighbour by
restricting Noble’s ability to sell gas domestically.
The companies involved are satisfied with the latest proposal, with Noble calling the deal "an appropriate and workable
solution". It said in a statement to Interfax the proposal "strikes the right balance" between addressing concerns about
monopoly ownership and providing regulatory certainty to the owners.
Sweetened deal
One analyst, who did not want to be named, said a promise to speed up approvals and lift the volume of gas available
for export from Tamar was made to sweeten the deal, while another option is said to include Jordan as a ‘domestic’
customer, thus widening the options for local sales.
A Noble spokeswoman said the company would continue to keep the development of Leviathan and the expansion of
Tamar on hold until a final agreement was signed, but it expected to be able to bring those operations back online less
than 12 months afterwards.
"Following a final agreement, we expect to be able to complete gas sales contracts, rebuild our project engineering and
execution teams, secure the necessary construction agreements with our suppliers and secure external financing
necessary to enable an FID [on Leviathan]," she said.
"Once we have taken an FID, we estimate [we will need] three to four years for construction and field development
before first production commences," she added.
Nati Birenboim, a former adviser to the Israeli minister of energy and water and now chief executive of Tamuz Group, is
optimistic the deal will be good for Israel – if only because new parties will have the opportunity to buy into the Tamar
and Leviathan fields.
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2. 19.5.2015 Israel softens anti­monopoly stance but new gas players still expected to flock ­ Natural Gas Daily ­ Interfax Global Energy
http://interfaxenergy.com/gasdaily/article/16124/israel­softens­anti­trust­rules­but­newcomers­still­drawn 2/2
"In the structure today you see Delek and Noble both in Tamar and Leviathan, [meaning] they are a monopoly," he told
Interfax. "But you will see the entrance of other interests in both fields [in the next few years]."
He suggested that future interest in the Tamar field – which has 15- and 20-year contracts to supply gas to Israel and
companies in Jordan, as well as interest from entities in Egypt – could come from finance sector organisations looking
for a less risky investment in the energy sector.
Birenboim also believes Noble and Delek will eventually have to bring in a larger partner to develop the Leviathan field,
given the up-to $8 billion price tag of extracting the gas. He sees at least one new larger energy company entering the
sector that way, but admits the lack of potential for another foreign or local operator to take over from Noble in Tamar
or Leviathan is a key reason for letting it keep the cross-ownership in both concessions.
Birenboim expects the agreement will be signed soon after Israel’s new government is installed next week.
Israel’s former Finance Minister Yuval Steinitz was appointed as the new minister of national infrastructures, energy and
water resources on Thursday, and will be responsible for settling the deal. He previously set up the Sheshinski
committee to review Israel’s natural resources taxes and supported its proposals for a steep tax hike on gas companies.
Meeting boycott
The antitrust commissioner has not attended meetings to develop the new framework as a protest against watering
down the anti-monopoly measures, and Israeli newspaper Globes has reported the authority’s legal adviser and chief
economist are siding with the regulator’s position.
The analyst said the government could use two methods to bypass Gilo. It could either use the Restrictive Trade
Practices Law to grant an exemption for a particular practice to boost foreign policy or national security, or use a
national energy and infrastructure projects bill – as proposed by Prime Minister Benjamin Netanyahu – that will allow
the government to speed up reforms.
Given the fragility of the new coalition and the intransigence of the parliament, the Restrictive Trade Practices Law is
likely to be the easier route, she said.