Uzi Landau top1.
(photo credit: KKL)
National Infrastructures Minister Uzi Landau on Sunday called upon the
government to ensure the timely development of the Tamar offshore gas field, in
an effort to secure the country’s electricity supply and energy
“The most important issue is to protect and ensure the
development of the Tamar offshore gas field according to the set timetable. The
project has already been delayed by the uncertainty regarding the proposed
changes to gas royalties and taxes,” Landau said.
“If the investment in
the Tamar field is not attractive and profitable for investors, there will be no
project. A failure to secure a timely supply of gas is threatening proper
electricity supply to the country.
It is the government’s responsibility
to secure proper supply of gas to Israel and therefore the draft recommendations
on the royalties from natural resources need to be adjusted in a way that will
benefit the public and take into account broader considerations such as
geopolitical and strategic interests as well as the question of energy
independence and gas exports.”
Landau laid out the position of the
ministry in response to Wednesday’s publication of the interim recommendations
of the Sheshinski Committee, which proposed to levy a special progressive tax on
the profits of gas and oil exploration partnership companies, while leaving the
gas royalty rate at 12.5 percent and canceling the depletion
The committee estimates that if the recommendations are fully
implemented, the government take of proceeds from large gas and oil fields will
be boosted to 66% from the current 30%.
“There is much talk about tycoons
making a lot of money but at the end of the day we have to be attractive to
investors, in particular foreign enterprises, so that the public will be able to
make a profit,” Landau said. “We need to be attractive as much as other places
so that we are chosen over Arab oil countries.”
Separately, the Israel
Securities Authority on Sunday published a research study on the heightened
stock market activity of gas and oil exploration companies, while calling for
clearer and more comprehensive reporting rules.
“There is a rapid surge
in market caps and volatility alongside a disproportionate rise in trading
volumes. High volatility in this market is sometimes triggered by rumors, making
it hard for the investor public to evaluate information and examine the real
value of the stock,” Gitit Gur-Gershgoren, head of the economics and research
division at the Israel Securities Authority, said at a press conference in Tel
“Furthermore, the risk in this sector is very high while the
information is very technical and hard to understand for the general public. In
light of the very unique characteristics of this sector, we have found it
necessary to formulate new reporting rules for gas and oil exploration
companies, which will make necessary information more accessible and clearer so
that the general public will be able to make balanced decisions about their
Gur-Gershgoren declined to provide more information on the
rules and what type and extent of information they will provide but added that
the new rules will be presented over the next few weeks.
Securities Authority hopes they will come into effect before 2011.
press conference, Gur- Gershgoren, presented research on the stock market
activity of the gas and oil exploration sector, which has been booming over the
past two years against the background of potentially huge gas finds at the Tamar
field and the Leviathan gas site, both 90 kilometers offshore from
The research showed that the aggregate market cap of the gas and
oil exploration companies listed on the Tel Aviv Stock Exchange jumped from NIS
5 billion in 2008 to NIS 39.8b. in October 2010.
Monthly trading volume
of gas and oil exploration companies in the first 10 months of 2010 amounted to
and reached a peak in September representing 30% of total
turnover on the TASE. Average daily turnover volume of the gas and oil
exploration partnership companies surged rapidly since the beginning of the
year, reaching a record of NIS 450 million compared with a high of NIS 150m. in
2009. In addition, oil and gas exploration partnership companies raised NIS
985m. so far this year compared with NIS 619m. for all of last
Despite the sharp increase in the market cap and trading volume in
the sector, the proportion of holdings of institutional investors in the shares
of gas and oil exploration companies has declined.
institutions’ holdings dropped from a peak of 10.75% in December 2009 to 8.81%
in June this year.