PM: Deri quits Economy Ministry, paving way for gas deal

Netanyahu says he will take portfolio, green-light controversial agreement on offshore fields; Shas head to get portfolio to be named later

Economy Minister Aryeh Deri  in Jerusalem, on October 25, 2015. (Alex Kolomoisky/POOL)
Economy Minister Aryeh Deri in Jerusalem, on October 25, 2015. (Alex Kolomoisky/POOL)

Economy Minister Aryeh Deri resigned from his post Sunday, opening the way for the government to green-light a multibillion dollar gas deal with US energy giant Noble Energy, a statement from the Prime Minister’s Office said.

“Minister Deri announced to me his intention to quit. In order to proceed with the (offshore gas) agreement the ministry will be transferred to me and I will give the green light” on a deal outline with an energy conglomerate to develop offshore gas fields, Prime Minister Benjamin Netanyahu said

The long-expected resignation will likely end a drawn-out affair during which Deri has refused to sign off on bypassing anti-trust regulations regarding the deal.

Deri has balked at giving the okay, but has also said he does not want to stand in the way of the energy deal, which Netanyahu has said could add hundreds of million of shekels to Israel’s coffers.

The prime minister said the other portfolio held by Deri, the Development of the Negev and the Galilee Ministry, will be renamed the Development of the Periphery, Negev and Galilee Ministry, referring to the areas outside the economic center of the country.

Deri is also expected to receive another portfolio, which has not yet been announced. Sunday’s development means Netanyahu now holds the portfolios for the Foreign Ministry, Communications Ministry, and Economy Ministry.

“We are taking today a big step toward advancing gas delivery to the State of Israel. Gas is the number one engine for economic growth in Israel for the coming years,” Netanyahu said at the weekly cabinet meeting.

Education Minister Naftali Bennett (Jewish Home) fiercely condemned Deri’s new jurisdiction over schools in the outlying areas, prompting the prime minister to keep the schools under Bennett’s authority, the Ynet news website reported.

“The children in the state of Israel are not a toy that can be moved from office to another,” Bennett said, before the prime minister agreed to his demand.

Deri told Netanyahu on October 25 that he would not use his ministry’s legal powers to give special exemptions from Israeli anti-monopoly regulations to the US-Israeli concern developing Israel’s recently discovered natural gas fields.

Under the terms of the deal, the government plans to give an international consortium led by Israel’s Delek Group and the American company Noble Energy rights to the largest gas reserve yet found in Israeli territorial waters, the Leviathan field, in exchange for a scaling back of their involvement in the currently operational Tamar field and the smaller Tanin and Karish fields.

Currently, Tamar’s single pipeline to the Israeli coast is the Israeli economy’s only source of natural gas, and development of the remaining fields has stalled over regulatory troubles.

The Leviathan find, thought to contain 18.9 trillion cubic feet (535 billion cubic meters) of gas, is considered a bonanza for the country, turning it into a major natural gas supplier and providing hundreds of billions for state coffers, according to Netanyahu.

But in December, then-antitrust commissioner David Gilo ruled that the Delek-Noble conglomerate may constitute a monopoly, sparking a vociferous national debate on the terms given to the energy companies.

Under Article 52 of the Antitrust Law, only the economy minister may override the antitrust commissioner’s ruling and give a special dispensation to a monopoly to operate in Israel. For much of the year, Deri has refused to give that dispensation, and Netanyahu failed over the summer to pass a Knesset vote transferring his “Article 52 authority,” as it is known, to the broader cabinet.

On October 25, Deri said he “would be the last to torpedo the deal,” despite his opposition to its provisions. He told Netanyahu he was not opposed in principle to leaving his cabinet post in favor of another, clearing the way for Netanyahu to appoint himself interim economy minister with the power to approve the deal.

“I told the prime minister I’m willing to leave the Economy Ministry in order not to stop the adoption of the framework,” he told Channel 2’s “Meet the Press.” Sources close to Netanyahu told the Haaretz daily at the time that “any solution to this issue will be taken together with and in coordination with Deri.”

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