Kerry had up to $1m stake in voided gas partnership

US secretary of state held shares in Noble Energy, co-owner of Leviathan and Tamar fields, whistleblower site reveals

Stuart Winer is a breaking news editor at The Times of Israel.

US Secretary of State John Kerry at the US State Department  in Washington DC, June 24, 2015. (AFP Photo/ Chris Kleponis)
US Secretary of State John Kerry at the US State Department in Washington DC, June 24, 2015. (AFP Photo/ Chris Kleponis)

US Secretary of State John Kerry in the past held up to a million dollars worth of shares in Noble Energy, the US-based firm that co-owns Israeli gas rigs in an arrangement that the antitrust authority has demanded be broken up because it forms a duopoly.

The revelation came as the security cabinet was set to vote on defining the gas issue as possessing security or political implications, enabling it to bypass the Israel Antitrust Authority.

The controversial move will allow the state to accept a compromise deal with the Leviathan and Tamar natural gas field owners despite the authority’s objections that it leaves operators Noble Energy and the Israeli Delek Group with too much control of the gas rigs.

Details of Kerry’s share-ownership were revealed by the freedom of information site Opensecrets on Thursday and were based on Kerry’s financial declarations from 2013.

Kerry apparently held between $500,000 and $1 million of Noble Energy shares and sold at least some of them in 2015 at a time when their value had slumped.

The US diplomat was reportedly instrumental in putting together a September 2014 deal between the Jordanian government and the owners of Israel’s Leviathan gas field.

In December he pushed Prime Minister Benjamin Netanyahu to sign energy supply deals in the region involving Noble, after the deal with Jordan fell through following objections by the state trust-buster.

“We continue to engage and we support all parties to move forward with the natural gas deal signed between Noble Energy and entities in Jordan and Egypt,” State Department spokesman Jeff Rathke said on December 30. “We strongly believe that these deals would enhance energy security in the region.”

Rathke did not disclose Kerry’s financial interest in the energy company at the time.

Antitrust Authority Commissioner David Gilo on December 23 voided the partnership allowing Noble and Delek to develop the Leviathan and Tamar gas sites in the Mediterranean Sea over objections regarding the price at which the companies were preparing to sell gas to the Israeli economy.

The Tamar natural gas field off the coast of Ashkelon (photo credit: Moshe Shai/FLASH90)
The Tamar natural gas field off the coast of Ashkelon (photo credit: Moshe Shai/FLASH90)

In May, Gilo resigned in protest after the government pushed forward a proposal that would leave the US conglomerate and its Israeli partner as the sole operators of both offshore gas rigs.

The dispute took another twist when the next day Finance Minister Moshe Kahlon disqualified himself from dealing with regulating the offshore gas fields because of his personal friendship with one of the owners of the Tamar field — despite having in the past claimed the relationship was not significant.

Kahlon notified Netanyahu that he would not take a hand in the affair due to his connection to businessman Koby Maimon.

While the revised draft being pushed by the government would reduce Noble’s holdings in the Tamar reservoir from 36 percent to 24% within six years and remove its veto rights in the partnership, the Texas-based company would still have the privilege of marketing gas from both reservoirs.

In April Netanyahu together with Energy and Water Minister Silvan Shalom authorized the sale of natural gas from Israel’s Tamar gas field to private clients in Jordan.

Under the terms of the $500 million deal, the Tamar natural gas reservoir partnership was to sell 1.87 billion cubic meters of natural gas to Jordanian companies Arab Potash and its affiliate Jordan Bromine over the next 15 years.

In 2013, Israel decided to export 40% of the country’s offshore gas finds, in an effort to transform Israel from an energy importer to a major world player in the gas market.

Tamar Pileggi contributed to this report.

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