Steinitz at odds with Tamar partners on royalties

The Minister of Finance supports higher royalties on all future oil and gas discoveries.

Sources inform "Globes" that Minister if Finance Yuval Steinitz supports raising the rat e of royalties payable to the state on all areas in which gas or oil have yet to be discovered.

This stance is opposed to the view expressed in the past by Minister of National Infrastructures Dr. Uzi Landau and Prime Minister Benjamin Netanyahu's bureau. It is also inconsistent with official Ministry of Finance statements and views expressed by senior ministry officials, to the effect that royalties policy should not be changed for areas where seismic tests have been carried out and large amounts of money have been invested.

The public committee on fiscal policy for oil and gas exploration, chaired by Prof. Eytan Sheshinski, met for its first session today. In advance of the meeting, sources in the Ministry of Finance said this morning that the possibility was still being considered of including the natural gas discoveries "Dali" and "Tamar" in the committee's brief.

However, "Globes" has learned that Steinitz's view is that royalties policy should not be changed for places where gas has been discovered. These have the status of leases from the Ministry of National Infrastructures. On the other hand, Steinitz does support raising the rate of royalties in all other areas, that is license and permit areas. In an interview with Channel 1 television, Steinitz said, "I made clear in the statement on the formation of the committee that the conclusions, if they call for changes, will apply to discoveries from now on." Steinitz's stance puts him at loggerheads with the partners in the Tamar discovery, with the results of the extended three dimensional survey of areas around Tamar about to be released. The partners say that the areas where the survey, which cost some $50 million, was carried out should be excluded from the committee's brief.

The areas in which the survey was carried out include the Ratio Sea licenses, among them the Leviathan prospect, the Alon and Ruth licenses, and Block 12 in the economic zone of Cyprus.

Published by Globes [online], Israel business news - - on May 30, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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