"Without gas exports, the Leviathan field will not be developed," the representative of a European bank which represents an oil major interested in becoming a partner in the gas field told "Globes" yesterday.
Commenting on the minority opinion in the Tzemach Committee which calls for postponing a decision on gas exports, the representative said, "Israel can be like Bangladesh and legislate whatever laws it wants, but the gas will stay in the ground. Developers won't come without the option of exporting, and the state cannot develop the fields on its own."
The possibility that an oil major will become a strategic partner in Leviathan was behind the scenes of the Tzemach Committee's discussions, and was even mentioned in its report. The reference is to several oil majors with which Delek Group Ltd. (TASE: DLEKG) and its Leviathan partners are in talks on 25% of rights to the gas field.
In the Tzemach Committee's minority opinion, which was submitted yesterday, the Ministry of Environmental Protection says that the committee's focus on the entry of a strategic partner was "particularly infuriating", and diverted the discussion from the focus on Israel's gas needs.
The representative of the European bank says that if the current recommendation to allow the export of half of the natural gas from Leviathan stands, this will make it worthwhile for a strategic investor to become a partner in the gas field. "50% is the minimum," he said. "Development of the field requires immense investment, even on the scale of the oil majors, so there is great sensitivity to any change in the recommendations. Any percent more or less for exports, or any postponement of a year in the timetable, will affect the final decision."
"Globes": How worried are you by the minister of environmental protection's opposition?
The representative: "We assessed that there would be opposition and that the conclusions would not be unanimous. Obviously, each ministry sees the need to protect the interests for which it is responsible. For us, what is important at the moment is that the influential ministries, such as the Prime Minister's Office and the Ministry of Finance, understand the importance of exports. At the moment, it seems that the opposition is insignificant."
Published by Globes [online], Israel business news - www.globes-online.com - on August 27, 2012
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