US energy giant rules out more concessions on Israel gas deal

The US energy conglomerate jointly tasked with drilling for natural gas off Israel’s coast said Monday that it would not be willing to compromise further on the multi-billion dollar deal, and warned that the tentative accord with Jerusalem may collapse.

In the face of stiff resistance from opposition lawmakers and an ongoing antitrust inquiry into monopoly claims, Houston-based Noble Energy told the Knesset Economic Affairs Committee that it would not consider any further compromises regarding its share of the stake in the Tamar and Levithian gas fields, both of which contain billions of cubic meters of natural gas.

“The gas framework that has been achieved is not a draft for continued negotiations. The concessions that we made over the last half year are the maximum concessions we are ready to make,” said Noble’s Israel manager Binyamin Zomer, according to Haaretz.

“We agreed to the concession on the understanding that it was an all-inclusive package. Changing parts of the framework could lead to its collapse,” he cautioned.

In December, Israel’s Antitrust Commissioner David Gilo froze a deal to divide up the Leviathan gas field that was drawn up between Noble and Israel’s Delek Group and the Israeli government. An impending Knesset vote to overrule the injunction aroused a storm of criticism on the grounds that it affords the energy conglomerates too much control over the national gas reserves.

Delek Group is one of Israel’s largest companies, owned by self-made business magnate, Yitzhak Tshuva.

Opponents of the gas deal with Noble and Delek say it amounts to “robbery” of Israel’s natural resources and are urging government transparency on the agreement.

The Noble-Delek partnership also owns two smaller reserves discovered recently off the coast of Israel. Last year, the partnership was branded a de facto monopoly by Gilo, who announced his resignation six weeks ago over the issue.

Last week, the cabinet decided to overrule a call from the country’s regulatory agency calling for a limit to the dominance of the companies in the industry. However a parliamentary vote was postponed indefinitely after Prime Minister Benjamin Netanyahu failed to cobble together a Knesset majority to pass the legislation.

The firms have been selling gas to the Israeli market from the Tamar field, which went online in 2013, and have agreed to sell to neighboring countries as well. The Leviathan field, the largest gas field in the Mediterranean, has not yet been developed.

Under the deal, Delek must sell its entire share of Tamar and Noble Energy must sell most of its holdings within six years. Delek must sell its holdings in two smaller gas fields within 14 months.

The forced sales are aimed at opening the industry to competitors. The deal also sets a price ceiling for future sales to Israeli companies and commits the gas firms to complete the development of the Leviathan gas field by 2019.

But critics say the deal might in fact strengthen the gas monopoly, because the companies will maintain a de facto monopoly over the Tamar field for the next six years before entering a similar partnership to develop the Leviathan field.

Times of Israel staff contributed to this report.