Israel reaches regulatory deal on gas, paving way to new output

By YAACOV BENMELEH and CALEV BEN-DAVID
Bloomberg

Israel and the developers of the country’s natural gas fields reached an agreement on a regulatory framework, coming one step closer to resolving a dispute that’s held up production. Shares of Israeli energy explorers rallied.

Israeli Prime Minister Benjamin Netanyahu said the deal would contribute billions to the economy and called on cabinet members to approve it. “There is every reason to adopt this framework,” he said at a news conference in Jerusalem. “Do not succumb to populism.”

The sides had been wrangling over ownership and pricing of these offshore assets since December, when Israel’s antitrust commissioner considered designating the partnership between Delek Group and Houston-based Noble Energy a monopoly. That move would have required them to sell stakes in the fields.

The policy outline will be presented to the cabinet on Sunday for approval, Energy Minister Yuval Steinitz said. The accord settled disputes on issues including pricing and milestones for the development of the largest field, Leviathan, according to a text message from his office.

The agreement will “allow for the development of Israel’s oil and gas reserves after a delay of several years,” Steinitz said.

The disputes have held up the production of gas from Leviathan and delayed expanded operations at the smaller Tamar. The failure to implement a gas strategy for the fields in the Mediterranean Sea has complicated export deals and antagonized investors.

Delek Group Ltd. rose 5.3%, the most in three months, to 1,179 shekels at 1:36 p.m. in Tel Aviv. Ratio Oil Exploration 1992 LP advanced 7.4% and was the biggest gainer on the TA-100 Index of stocks.

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