Globe: Israeli gov't officials mull gas fields compromise
Just before the final decision by Antitrust Authority head Prof. David Gilo on declaring if the Leviathan natural gas reservoir is a cartel, decision-makers in Israel's energy sector face a dilemma. Should they offer the gas developers a package deal, a compromise that will instantly solve all the disputes interfering with the development of the natural gas reservoirs, or to continue on the "safe" course leading to a confrontation with the developers in the antitrust court. The current compromise proposals on the table involve the Delek Group Ltd. controlled by Yitzhak Tshuva, selling its rights in the Tamar reservoir, while leaving the US partner, Noble Energy, with its holdings in both reservoirs (with the possibility of diluting its rights in the Tamar reservoir). At the same time, mechanisms are being examined for ensuring that Noble Energy does not take an active part in negotiations for the sale of gas to the domestic market, which will, at least ostensibly, create competition between Isramco in the Tamar reservoir and Delek Group and Ratio Oil Exploration (1992) LP (in the Leviathan reservoir. A comprehensive agreement within the government on such a compromise proposal, however, is still far off.
The path leading to the "end of the conflict" depends on achieving a broad consensus among all the regulators dealing in the sector: the Antitrust Authority, the Ministry of Finance budget department, the Ministry of National Infrastructure, Energy, and Water Resources, and the Public Utilities Authority (Electricity) - just to mention the first ones that come to mind. Beyond this, the question arises of what status and validity such an agreement will have - whether it will be binding on the next government in a way that will create certainty in a sector with strategic importance for the economy and the nation.
As of now, it appears that the second question is simpler. Gilo has full authority to reach a compromise with the gas developers, regardless of the elections. He is entitled to issue a new consent decree, and he will receive approval from whatever new government is elected. Gilo can issue a consent decree at the end of the hearing for the gas companies that will be effective two days later (for Noble Energy on Tuesday, for Delek Group on Wednesday, and for Ratio on Thursday). The antitrust laws put no time constraints on Gilo, which is, by the way, a topic worthy of separate discussion.