Deri slams ‘intelligence failure’ in Egypt gas find
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Deri slams ‘intelligence failure’ in Egypt gas find

Economy minister criticizes fellow minister Steinitz for leaving Jerusalem in the dark over massive reserves found off neighbor’s coast

Tamar Pileggi is a breaking news editor at The Times of Israel.

Economy Minister Aryeh Deri speaks with Energy Minister Yuval Steinitz during a plenum session in the Knesset on June 17, 2015. (Miriam Alster/FLASH90
Economy Minister Aryeh Deri speaks with Energy Minister Yuval Steinitz during a plenum session in the Knesset on June 17, 2015. (Miriam Alster/FLASH90

Economy Minister Aryeh Deri on Tuesday said that Energy Minister Yuval Steinitz was responsible for a “first-class intelligence failure” that left Israeli officials in the dark about the discovery of a massive natural gas reserve off the Egyptian coast earlier this week.

Deri said that while Israel worked to finalize a contentious agreement regarding its own sizable reserves in the Mediterranean Sea, cabinet ministers were unaware that Egypt — a potentially major Israeli energy client — was exploring its own offshore gas reserves, Channel 10 reported.

Deri’s comments come days after news broke that the region’s “largest ever” natural gas field was discovered in neighboring Egypt, casting doubts on the viability of the current deal between the government and a US-Israeli energy consortium that has been stalled for months due to an ongoing regulatory and political dispute.

Earlier this year, the Wall Street Journal reported that Egypt was considering importing natural gas from Israel if its price were low enough and if one of the drilling companies dropped its legal action against the Egyptian government. Stakeholders in Israel’s Tamar gas field signed a contract earlier this year with a private Egyptian concern to sell as much as five billion cubic meters of gas to Egyptian companies over the next three years.

The US company Noble Energy and its Israeli partner Delek Group have faced a political backlash in recent months over a proposed deal with the government to develop of a number of sizable natural gas reserves discovered in Israeli waters in recent years.

The deal has been controversial, with critics, including former antitrust commissioner David Gilo, expressing concern that the deal created a de facto monopoly that would lead to high gas prices for Israelis.

The issue was thrown into the spotlight when Gilo, while still antitrust commissioner, said last year that the Noble-Delek partnership resembled a monopoly, and called for opening Israel’s natural gas market to increased competition. Gilo tendered his resignation in May over the dispute.

An aerial view of the Tamar gas-processing rig 24 kilometers off the southern coastal city of Ashkelon, June 23, 2014 (Moshe Shai/Flash90)
An aerial view of the Tamar gas-processing rig 24 kilometers off the southern coastal city of Ashkelon, June 23, 2014 (Moshe Shai/Flash90)

Prime Minister Benjamin Netanyahu has championed the controversial deal, saying it would pump billions of shekels into the economy.

On Monday, the prime minister announced that a parliamentary vote on the deal would be temporarily delayed until a new antitrust commissioner was appointed.

Although as Economy Minister Deri can override the the commissioner and approve the deal between Israel and Noble-Delek, he told Knesset reporters last week that he would refrain from exercising his authority in the matter and would wait for the new appointment.

On Sunday, Steinitz said Egypt’s discovery should serve as a wake-up call for Israel to finalize the agreement on its own reserves in the Mediterranean. He called the find a “painful discovery” and said the state was sleepwalking in the face of a rapidly changing world, and that this foot-dragging would have ramifications for Israeli exports.

Italian energy group Eni announced Sunday it had discovered the “super-giant” natural gas field off Egypt, describing it as the “largest ever” found in the eastern Mediterranean.

Eni said the discovery — made in its Zohr prospect “in the deep waters of Egypt” — could hold a potential 30 trillion cubic feet of gas over an area of 100 square kilometers (38.6 square miles).

Israel’s Leviathan gas field, which is estimated at 16 trillion cubic feet, has so far been thought to be the largest in the eastern Mediterranean.

Times of Israel staff contributed to this report.

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