Noble Energy, a U.S.-based oil and gas company, has said that the development of the Leviathan gas find in the Mediterranean Sea could risk further delays after the Supreme Court of the State of Israel’s ruling that blocked a crucial provision of the plan to develop the field.
Namely, Noble Energy was notified on Monday that the Supreme Court of the State of Israel affirmed the Government of Israel’s natural gas regulatory framework, with the exception of the stability provisions.
According to Noble Energy, while recognizing the necessity of regulatory stability, the Court concluded that the Government should provide stability assurances and provisions through an alternate legal mechanism.
The Court provided the Government up to one year to resolve this matter. If the arrangement is not made at the end of a year from the date of the ruling, the Natural Gas Outline Plan will be canceled.
The Leviathan partners have already been through several regulatory hurdles that have delayed the development of the Leviathan field.
Noble Energy stated it was disappointed by this decision, saying that the Israeli court’s ruling risks delay to Leviathan timing.
David L. Stover, Noble Energy’s Chairman, President, and CEO, commented, “The Court’s ruling, while recognizing that timely natural gas development is a matter of strategic national interest for Israel, is disappointing and represents another risk to Leviathan timing. Development of a project of this magnitude, where large investments are to be made over multiple years, requires Israel to provide a stable investment climate.”
Stover added: “Noble Energy has consistently maintained that stability is a minimum condition for project development, and our position has not changed. As we have stated before, we will vigorously defend our rights related to our assets to protect shareholder value. It is now up to the Government of Israel to deliver a solution which at least meets the terms of the Framework, and to do so quickly.”
Last year, Prime Minister Benjamin Netanyahu reached an agreement with Noble Energy and its Israeli partner, Delek Group, that allowed them to keep control of the giant natural gas deposit in the Mediterranean, the Leviathan field, but forcing them to sell some other, smaller assets.
In December 2015, Netanyahu signed a gas framework deal, bypassing the Anti-Trust authority, saying he acted to protect Israel’s energy security.
He also said that, while Israel will be getting a relatively cheap source of energy, the development of Leviathan was also important for foreign relations as several countries are interested in the gas that would be produced from the field.
After the December deal, Noble said that the natural gas framework to be implemented by the Israeli government provided the regulatory certainty and stability needed to proceed with the development of both the Tamar expansion and Leviathan, while providing transparency for future domestic pricing and natural gas competition in Israel.
Offshore Energy Today Staff