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Government approves revision to protracted natural gas deal

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Israel’s government gave approval to a revised version of the controversial agreement between the state and major investors over Israel’s nascent natural gas industry.

The Leviathan and Tamar off-shore natural gas fields are thought to contain around 800 billion cubic metres in gas, enough to supply the Israeli market for a century. Israeli company Delek Drilling and American firm Noble Energy hold controlling stakes in both fields and have been largely responsible for their development so far.

However, in December 2014, Israel’s Antitrust Regulator David Gilo recommended ending Noble and Delek’s dominance. The government eventually came to an agreement which will see Delek and Noble relinquish some holdings in Tamar and two smaller fields. The arrangement also regulates the industry in general, including the share of profits. The wrangling required Netanyahu, as economy minister, to invoke a legal clause to circumvent the Antitrust Regulator’s recommendation, in order to implement the deal. Meanwhile, public protests have taken place, accusing the government of bowing to corporate greed.

In March, the deal faced another obstacle, as the High Court responded to a petition by opposition parties ruling that the agreement would be cancelled within a year, unless an alternative is found to the so-called “stability clause”, which ensures that no changes to the agreed regulations can be made for ten years.

Yesterday, with such a change having been made, the cabinet approved the deal. Only Environmental Protection Minister Avi Gabbay opposed the new framework. Prime Minister Benjamin Netanyahu said that the revised draft “incorporates within it the comments that were received from the High Court of Justice”. He added: “The important thing is to not delay, to move forward, and to get the gas which also brings enormous resources to the citizens of Israel — in welfare, education, in health, and in fact in every aspect of life.” Netanyahu called the gas deal “a most important step, even historic” for the country.