Connect with us

Hi, what are you looking for?

Jewish Business News

Business

Regulator mulls ousting Delek, Noble Energy from Leviathan

The Antitrust Authority has summoned the companies to review the compromise that let them hold the Leviathan gas reserve.

Please help us out :
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at office@jewishbusinessnews.com.
Thank you.

Leviathan GAS FIELD

 

The Antitrust Authority, headed by Prof. David Gilo, notified Delek Group Ltd. (TASE: DLEKG) and Noble Energy today that it was re-examining its consensual order and was considering whether to issue a determination that Delek and Noble Energy’s stakes in the Leviathan natural gas reserve are a cartel that has not received court approval.

Representatives of Delek Group and Noble Energy were summoned for a meeting with Gilo at 18:30 today, at which it will be decided whether the compromise arrangement between the sides will stand or fall. As a result, the prices of the partners in the Leviathan filed, Ratio Oil Exploration (1992) LP (TASE:RATI.L) Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling dropped on the Tel Aviv Stock exchange today.

The consensual order under the compromise arrangement included an instruction to Delek and Noble Energy to sell their rights in the Karish and Tanin fields, which together hold some 58 billion cubic meters (BCM) of gas, and in exchange to continue holding the Tamar and Leviathan rights together, as a monopoly. In aggregate, the Tamar and Leviathan fields contain more than 900 BCM.

The agreement, details of which were disclosed in “Globes”, was meant to have ended the proceeding that Gilo began more than two years ago when he declared an apparent cartel in the 2007 deal whereby Delek Group and Noble Energy bought 85% of the rights in the exploration permits in which the Leviathan gas reserve was discovered in 2010. Under the compromise arrangement, Delek and Noble Energy were to have sold the Karish and Tanin reserves within two years, plus a further quantity of gas from Leviathan, amounting to 70 BCM altogether.

Now, the Antitrust Authority has in effect changed its mind. The remedy that the Authority will ask from the court is the splitting of the ownership of the Tamar and Leviathan reserves. In other words, Delek and Noble Energy could be ousted from Leviathan. The two companies currently produce gas from Tamar.

In the past, Gilo has said that he was reluctant “to do something” with the Leviathan reserve because toughening the regulatory stance was liable to bring in train legal hearings that would take years, and would harm the development of the gas reserve and hence the Israeli public.

Nevertheless, in the past few months, the Antitrust Authority has arrived at a different view of the damage liable to be caused if it decides to confront Delek and Noble Energy. Among other things, the Authority has noted that demand for gas has risen at a rate 10% below forecast, and this strengthened the conclusion that the harm to the economy will be small if the development of Leviathan is delayed a few years.

Published by Globes [online], Israel business news – www.globes-online.com

Newsletter



Advertisement

You May Also Like

World News

In the 15th Nov 2015 edition of Israel’s good news, the highlights include:   ·         A new Israeli treatment brings hope to relapsed leukemia...

Entertainment

The Movie The Professional is what made Natalie Portman a Lolita.

Travel

After two decades without a rating system in Israel, at the end of 2012 an international tender for hotel rating was published.  Invited to place bids...

VC, Investments

You may not become a millionaire, but there is a lot to learn from George Soros.

Copyright © 2021 Jewish Business News