MKs applaud antitrust commissioner’s move to review Leviathan gas players

Gas industry stakeholders appeal to PM to intervene, enable reservoir development.

By
December 29, 2014 22:31
3 minute read.
Hadera

A man points as he stands on a tanker carrying liquified natural gas, ten miles off the coast from Hadera. (photo credit: REUTERS)

 
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Knesset members and social activists voiced support for Israel Antitrust Authority commissioner David Gilo on Monday, who last week announced his intentions to reevaluate whether the Leviathan gas reservoir developers constitute a cartel.

In a surprise announcement last Tuesday, Gilo said that a proposed consent decree regarding the entry of the Delek Group and Noble Energy into Leviathan would not be submitted to the Antitrust Tribunal for approval as had been agreed upon earlier this year. The proposed decree would have allowed the two companies, which are the main partners in both the Leviathan and neighboring Tamar gas reservoirs, to remain in the basins without being defined as a cartel.

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At a special session held in the Knesset on Monday afternoon, initiated by MK Shelly Yacimovich (Labor), Knesset members and activists attacked the two companies and encouraged Gilo to dismantle the monopoly.

“Gilo will be subject to the constant attack of gas tycoons, and it is our duty to protect him,” Yacimovich said. “He understood that he could not carry on his shoulders such a shame, scandal and theft of this magnitude.”

Dr. Joseph Langotsky, the Israeli geologist responsible for the discovery of the Tamar natural gas reservoir, described the process of exploration that began in the 1990s – emphasizing how Noble Energy and the Delek Group’s Delek Drilling and Avner Oil Exploration only joined in 2005.

“Only years after the project began, after we did and formulated everything, did Avner, Delek and Noble Energy join, without paying their share of the expenses of the past,” Langotsky said.

Acknowledging that Noble Energy did make improvements with field surveys during explorations, Langotsky stressed that the company was simply making improvements based on previously uncovered data.



“The Delek and Avner companies, which joined as developers six years after the project began without any contribution on their part – as well as Noble Energy – received not on a silver platter but on a golden platter the winning lottery ticket of Tamar,” he said.

Meanwhile, MK Avishay Braverman (Labor), who has been arguing for price supervision on natural gas, advised the government “to take responsibility, to get into the thick of things and find a quick solution.”

MK Moshe Gafni (United Torah Judaism), added that “God did not order this gas for Tshuva, but for the people,” referring to Yitzhak Tshuva, the chairman of the Delek Group. Gafni emphasized, however, that he appreciates a certain “dramatic change” that has occurred in Israel in recent years.

“In the past, you could not deal with the tycoons, against those who took what God has given to the citizens of Israel,” Gafni said.

While many Knesset members and social activists continue to applaud Gilo’s actions, gas industry developers and investors have slammed the regulator’s move as causing undue delay in the development of a critical Israeli resource.

Uri Aldubi, chairman of the Association of Oil and Gas Exploration Industries in Israel, sent a letter to Prime Minister Benjamin Netanyahu on Monday asking him to intervene and allow the development of Leviathan to continue. Aldubi is also a founder and chairman of the Halman-Aldubi Group and a director at Israel Opportunity Oil and Gas Exploration, a stakeholder is several smaller Mediterranean basins.

“Time and time again we see that Israel cannot rely on imports for its energy sources,” Aldubi said. “To ensure energy independence and operational capacity, Israel must commit to encouraging ‘blue and white’ oil and gas extraction. We consider the task of finding and producing [oil and gas] a national mission.”

Aldubi reminded the prime minister in his letter that despite many attempts by other firms, Noble Energy is still the only international company that has agreed to work in Israel’s gas sector despite the regulatory, geopolitical and economic risks. Ordering Noble Energy to leave Leviathan would discourage new international players from exploring in Israel’s hydrocarbon sector, he argued.

“Unfortunately, the biggest losers from the commissioner’s decision will actually be the citizens of Israel, who will lose billions of dollars in tax revenues and the chance to turn Israel into an energy power,” Aldubi said.

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