BICOM

Shas leader Aryeh Deri has agreed to resign as Economy Minister, opening the way for Prime Minister Benjamin Netanyahu to implement a protracted deal with the major investors in Israel’s natural gas industry, which is set to significantly speed up its development.

The Leviathan and Tamar 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. Tamar is already Israel’s sole supplier of natural gas.

However, further development was thrown into doubt in December 2014, when Israel’s Antitrust Regulator, David Gilo recommended ending the dominance of Noble and Delek, accusing them of constituting a monopoly. Noble and Delek indicated that they may end development entirely and concerns were raised that Gilo’s recommendation if adopted, would impact not only the Israeli energy industry but wider investment in the country, due to concerns of over-regulation.

An agreement was finally reached between the government and the two companies in August. However, implementation depends on by-passing the authority of Gilo, which can only be authorised by the Economy Minister. Deri made clear that he would not sign such a provision, but did not wish to stand in the way of the deal. As a result, he announced his resignation yesterday “with sorrow,” but explained that “the state needs to launch the gas framework.” Prime Minister Netanyahu will temporarily fill the portfolio and told his cabinet yesterday that natural gas will become “the number one growth engine in Israel in the coming years.”

Deri has been handed an expanded Negev, Galilee and Periphery Development Ministry and may well receive another ministry, possibly becoming Welfare Minister, in return for his resignation as Economy Minister. Zionist Union MK Shelly Yachimovich condemned the arrangement as “dubious” and a “stinking manoeuver” delivering a “benefits package for the gas companies.”