The Tamar gas processing rig off the coast of Israel 370.
(photo credit: Noble Energy)
The bureaucratic impediments plaguing Israel’s natural gas sector are deterring foreign investment and putting the country at risk of falling behind potential competitors like Lebanon, an industry veteran stressed at a conference on Tuesday morning.
“Time is not on our side,” said Maj.-Gen. Yossi Peled, CEO, Eilat Ashkelon Pipeline Co. “And I’m saying this as an understatement because it’s actually worse than that.”
Unlike Israel, other countries around the world “are not just sitting around and waiting for all the decisions to be made by regulators,” argued Peled, who was addressing participants in the Israel Energy and Business Convention 2013 in Kfar Maccabiah. The bureaucracy involved with exploring and developing energy resources in Israel is often so complicated that foreign companies may become more interested in wading in other waters, he explained. In order for exploration and production to advance, however, such foreign investment is necessary, he added.
One potential increasingly attractive exploration choice could be the waters belonging to Lebanon, Peled said.
“It’s no secret that they’re also having explorations,” he continued. “It’s quite probable that there will be gas found on the shores of Lebanon.”
Already, 32 international companies are in the process of negotiating with the Lebanese government, Peled said. Presumably, he explained, these companies are under the correct impression that “the bureaucracy they will face will not be as entangled as ours.”
One such entanglement that Peled mentioned is the fact that the Atwood Advantage deep-water drilling ship commissioned by Noble Energy – the largest of the partners in the Leviathan reservoir exploration – is sitting idle at a dock in Korea, rather than exploring the gas and potential oil of Leviathan. The delay in transferring the ship to Israel is allegedly due to a variety of bureaucratic impediments.
Peled stressed, however, that it is crucial for Leviathan to be developed as a strategic site immediately. Pipelines must be constructed, gas reception facilities must be built and regional export agreements with neighboring countries must be signed, he added.
Israel’s energy resource reality may have undergone significant changes for the better in recent years, but “I’m not sure we can say we are making the best use of this reality change,” Peled said.