Published On: Thu, May 28th, 2015

Delek-Noble Energy Gas cartel’s flat rejection of the state’s demand for a price ceiling

Kahlon breaks election pledge to tackle gas monopoly

 

Internal friction in the government and Antitrust commissioner David Gilo’s resignation have strengthened the natural gas companies’ powerversus the government, as evidenced by the Delek-Noble Energy cartel’s flat rejection of the state’s demand for a price ceiling on gas supplies.

The Gas partnership self-confidence relays on Israel’s Minister of Finance Moshe Kahlon, who has broken his election pledge to liquidate the gas monopoly in that country. Kahlon decided to stay out of this issue due to his friendship with Koby Maimon, one of the partners in the Tamar offshore gas field.

Three months ago Israeli antitrust commissioner Prof. David Gilo threatened that he would “dismantle the monopoly, ” of US giant Noble Energy and its Israeli partner Delek in the Leviathan and Tamar offshore gas fields.

Later on, Gilo announced that he would postpone the process until after the elections and the formation of a new government.

Immediately after Gilio’s announcement, Kahlon’s party Kulanu published this statement:

“The chairman of the Kulanu Party made his first comment on the decision by the Antitrust Authority director general to postpone dealing with the gas monopoly until the next government is formed, saying, ‘This is another government surrender to the monopolies and tycoons, and the public is the big loser. The circus will end on March 18. As Israel’s next Minister of Finance, I will act courageously and decisively on behalf of the public against over concentration to liquidate the monopolies, cut the cost of living, and on the side of all citizens of Israel.”

Kahlon did not mention his close ties with Maimon in that statement. Koby Maimon owns over a quarter of Tamar natural gas reservoir through Isramco (Nasdaq CM).

On Monday David Gilo resigned over his opposition to the dominant position of Leviathan and Tamar partnership. He said that preserving the stranglehold of Noble and Delek on the natural gas market “undermines competition.”

One day after the resignation, on Tuesday, Kahlon made public his decision to exclude himself from the decision-making process on the ownership of the state’s natural gas finds, due to his close friendship with Koby Maimon.

The finance ministry stressed that Kahlon still, “supports dismantling the gas monopoly and opening the market to competition, ” while transferring his authority to Prime Minister Binyamin Netanyahu, despite having promised to deal with the issue before the elections.

However,  in a pre-election Channel 2 interview, Kahlon unequivocally promised more than once that he would break up the gas monopoly.

Three months later, the situation is completely different. Gilo resigned for lack of government backing for liquidating the gas monopoly, Kahlon is shirking his responsibility, and all authority in the matter has been given to Netanyahu, who is falling in line with the gas companies.

Netanyahu on Tuesday defended the impending gas arrangement, saying Israel would “not repeat mistakes other countries made seeking ideal solutions for their gas” which left them undeveloped.

“We will act in accordance with a prudent consideration that balances competition and worthwhileness and extract the gas from the depths of the sea, ” Netanyahu told his cabinet.

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