Tshuva: Gas exports worth $100b to Treasury

Delek controlling shareholder Yitzhak Tshuva: Gas exports alone will generate NIS 100 billion for the treasury over the next 20 years.

"It is especially important these days to remember that gas exports alone will generate $100 billion for the treasury and the Israeli economy over the next 20 years," said Delek Group Ltd. (TASE: DLEKG) controlling shareholder Yitzhak Tshuva at Mizrahi Tefahot Bank (TASE:MZTF) business customers conference today. He said that keeping reserves for the domestic market, while allowing exports, as the Tzemach Committee recommends, are important for the economy.

"The government should encourage gas exploration deals in Israel, and ensure that more companies, both Israeli and foreign, will enter the industry. More companies means more drilling, and Israel will strengthen its position as an important player in the field. It should be remembered that the government's take from the gas industry, from taxes and royalties has been set at 60%, which means that the Israeli public and the state's treasury are the main beneficiaries of the industry's success," said Tshuva.

"Gas will be a lever for developing bilateral relations between Israel and many countries in the region and for the development of joint economic projects by Israel and its neighbors, a fact which will greatly strengthen Israel's geopolitical power."

Avner Oil and Gas LP (TASE: AVNR.L) DEO and Delek Drilling LP (TASE: DEDR.L) chairman Gideon Tadmor said, "We now have an historic opportunity to change the Israeli economy and use the gas discoveries as a growth engine for the economy and society, in a way that will affect the lives of every citizen. We must not stop this momentum."

Ratio Oil Exploration (1992) LP (TASE:RATI.L) CEO Yigal Landau told “IDF Radio" (Galei Zahal) that $500 million has been invested in Leviathan, which the company owns with Delek and Noble Energy Inc. (NYSE: NBL), and that its development budget is an additional $5.4 billion. "When the government decided in the 1990s to hand the oil and gas exploration industry to the private sector, it was after 40 years during which government companies wasted a lot money and failed. It took us 20 years," he said.

As for exports, Landau said, "The domestic market is small and limited. Agreements with Tamar (jointly owned by Delek, Noble Energy, and Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L)) have closed the domestic market for many years. It is important that Leviathan supply gas to the domestic market, but to finance its development, it is important for exports to be permitted."

Published by Globes [online], Israel business news - www.globes-online.com - on May 19, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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