The Cabinet of Israel has approved the outline to increase the quantity of natural gas produced at the Tamar natural gas field and to “rapidly develop” the Leviathan, Karish and Tanin natural gas fields.
According to reports, the arrangement stipulates Noble Energy and Delek Group will commit to invest $1.5 billion in the development of Leviathan over the next two years, and also reduce their respective stakes in the Tamar offshore gas field. The agreement also envisions the ceiling price of gas for sale to Israeli companies will be lower, Reuters reports.
Prime Minister Benjamin Netanyahu said at the start of the meeting on Sunday:
“Today, the Cabinet will pass a historic decision, no less. This decision will give Israel’s citizens, will put into the state coffers, hundreds of billions of shekels. This money will benefit education, health, social welfare and other national needs. I would like to commend the work done by Minister Steinitz’s team which has led to a very significant reduction in the price the state will pay for gas and to other changes that will greatly improve the outline. I would like us to pass the decision by a large majority, and rightly so.
The Leviathan development has been stalled since last year, after the Israeli State Authority declined to give its approval, citing lack of competition, and branding Noble Energy and Delek consortium a monopoly, as they control Israel’s largest gas fields, Tamar and Leviathan.
David Gilo, the Israeli Antitrust Authority’s director in May announced his resignation amid disagreement with the government, saying the government was entering into a deal that would not bring competitiveness into the market.
“We need to extract the gas from the sea. This decision is an important milestone.”
In a statement on Sunday, prior to the Cabinet approval, Netanyahu said: “I am not impressed by populism – to me it is only populism, even though people could believe in what they are saying, but the country needs gas. Gas resources in our region will be developed, unfortunately, either way, and we need to see to it that our resources work at full capacity.
“We need to extract the gas from the sea. This decision is an important milestone. We are overcoming the obstacles step by step. This process will not be stopped. The gas will be extracted from the bottom of the sea and will reach Israeli citizens, Israeli industry and the Israeli economy – for the benefit of the citizens of Israel.”
Noble Energy has a 36 percent operated working interest at Tamar, with gross mean resources of 10 trillion cubic feet (Tcf) of natural gas. Tamar was the largest deepwater natural gas discovery in the world in 2009. As for the Leviathan, it is one of the largest offshore gas fields in the world with gross mean resources of 22 Tcf of natural gas.