BICOM

Israel’s High Court ruled over the weekend that a key clause must be changed in 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, which has generated a deal to supply gas to Jordan, with others in the pipeline.

However, in December 2014, Israel’s Antitrust Regulator, David Gilo recommended ending Noble and Delek’s dominance. Eventually, the government 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 has 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.

Responding to a petition by opposition parties, the High Court said on Sunday that the deal 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.

In response, Netanyahu said that the ruling “threatens the development of Israel’s gas reserves. Israel is regarded as a state with excessive judicial intervention, which makes it difficult to do business.” However, opposition leader and Zionist Union head praised “A correct and brave decision by the High Court.” A Zionist Union statement said that “the gas belongs to all of the citizens of Israel and not just to a small group of those close to the prime minister.”