Israel Reaches Deal With Energy Firms on Leviathan Gas Plan

Source: Reuters 5/18/2016, Location: Middle East

Israel has reached a new deal with Texas-based Noble Energy and Israel's Delek Group that will allow the firms to move forward with development of the huge Leviathan natural gas field, Israel's finance minister said.

The Leviathan project hit a major obstacle in March when Israel's Supreme Court blocked a previous agreement that bound the state to the terms of the deal for 10 years. The agreement had meant the government would be committed not to change taxes, export quotas or other regulation.

The court's objection also rattled the broader exploration sector where companies have been waiting to see how the saga plays out before investing in new offshore drilling.

Finance Minister Yuval Steinitz said the new agreement, which will be brought to the government for final approval in the coming days, gives the state more leeway to change policies if needed.

"The new version gives future government space to judge whether to change policies in the field of natural gas, should this be required," he said in a statement.

Noble said in a statement that it had held discussions with the government "to formulate stability language which enables us to continue to progress the Leviathan project on timelines previously indicated."

"This is an important milestone in creating a stable investment environment," it said.

Delek declined comment.

Noble had warned that the court ruling could delay development of Leviathan, which it hoped to complete by the end of 2019. Steinitz said he hopes the new agreement will allow the companies to stay on schedule and push others to renew exploration.


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Related Categories: Coal  Electricity  General  Natural Gas  Oil 

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