Treasury warns Tshuva: Get to work on Tamar

In the wake of the explosion in the Egyptian gas pipeline, Delek insists that it is working around the clock.

The Ministry of Finance openly confronted Delek Group Ltd. (TASE: DLEKG) controlling shareholder Yitzhak Tshuva today. At a press conference, top ministry officials gave out a clear message: Tshuva is deliberately creating confusion about development of the Tamar offshore natural gas reservoir in order to obtain further tax breaks in the Knesset on the Sheshinski committee recommendations to increase the government's take on oil and gas revenue.

The ministry officials said that our message to Tshuva is this: Get to work. They assert that while Tshuva is deliberately preventing any information about work at Tamar from leaking out, his partner in the project, Noble Energy Inc. (NYSE: NBL), is sending calming messages to the Ministry of National Infrastructures, saying that the work is going full steam ahead, on the basis of the original development plan.

"The uncertainty that Tshuva is creating is publicly irresponsible," says the Ministry of Finance. "The entire economy is waiting for gas from Tamar. There are at least three customers waiting for gas from Tamar, and prepared to close contracts with Tshuva today, not yesterday. How can it be under these conditions that it's not possible to reach financial closing with the banks?"

The officials are referring to Israel Electric Corporation (IEC) (TASE: ELEC.B22), Israel Corporation (TASE: ILCO), and Dalia Power Energies Ltd.

Delek rejects the Ministry of Finance's accusations. Only yesterday, the company touted that it had suspended its campaign against the Sheshinki committee recommendations, and stood by the colors like disciplined troops when gas imports from Egypt were halted following an explosion in the gas pipeline to Israel and Jordan.

"Whenever we are needed because of problems with the Egyptian gas supplier, we do our duty without asking questions, and this is the thanks we get" said a Tshuva aide today.

Delek says that the Sheshinski committee changed the business and financial model of the Tamar project. A company source said, "It takes time to change 200 and 300-page documents. Anyone who thinks that it is possible to bring the house down on us every time and not expect it to have commercial repercussions is mistaken."

In response to the Ministry of Finance's accusations, Delek said, "It is astonishing that while we are silent and working round the clock to meet the gas shortfall and bring forward gas deliveries from Tamar, the Ministry of Finance is engaged in ego games."

Delek Group subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 15.625% of Tamar, Noble Energy owns 36%, Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) owns 28.7%, and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) unit Alon Natural Gas Exploration Ltd. (TASE: ALGS) owns 4%. Delek and Noble Energy also jointly own Yam Tethys, which supplies natural gas to IEC, and they are partners, together with Ratio Oil Exploration (1992) LP (TASE:RATI.L) in the Leviathan field.

Published by Globes [online], Israel business news - www.globes-online.com - on February 6, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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