BICOM

Israel’s Prime Minister Benjamin Netanyahu yesterday made a long-awaited announcement on the future of the country’s significant natural gas reserves.

The Tamar gas field, 81 miles off Israel’s coast was discovered in 2009 and comprises gas reserves of up to 238 billion cubic metres (8.4 trillion cubic feet). Production from the even bigger Leviathan field, one of the world’s largest offshore discoveries over the past decade, is scheduled to begin in 2016. However, investors have delayed production from Leviathan until a decision had been made on how much gas would be exported abroad. Israel’s geographical proximity could make it an important energy supplier to Europe.

Flanked by Minister for Energy Silvan Shalom, Finance Minister Yair Lapid and Bank of Israel Governor Stanley Fischer, Netanyahu announced that sixty per cent of Israel’s natural gas would be reserved for domestic use with the remainder to be exported. The government-appointed Tzemach Committee recommended last year that Israel retain slightly less than this amount. Netanyahu said, “The amount of gas will supply the needs of the economy for at least the next 25 years. This is a balance between the need to ensure energy sources for Israel’s citizens and the need to export gas which will generate revenue for use by Israel’s citizens.” He said that the state would retain sixty per cent of export revenues, yielding an estimated £39billion for state coffers. The decision will be brought for cabinet approval on Sunday.

However, the decision to export forty per cent of the gas was described yesterday by Labour Party head and leader of the opposition Shelly Yachimovich as “a robbery of the Israeli public.” She vowed to take the issue to the High Court of Justice, saying that the gas “which belongs to all of the state’s citizens, can grant the country energy independence, a dramatic drop in energy and water prices.”