Regulator allows Leviathan gas export talks

The Antitrust Authority has allowed talks for gas exports to Turkey, Jordan, and the Palestinian Authority.

Sources inform ''Globes'' that Antitrust Authority director general David Gilo has allowed the partners in the Leviathan gas field to jointly hold talks for the export of natural gas to Turkey, Jordan, and the Palestinian Authority, because of their strategic importance to Israel. The approval is provisional, until Gilo makes a final decision whether to declare the Leviathan partners a cartel, in which case he may set rules to ban them from acting jointly on the sale of gas from the field.

Gilo's decision is unrelated to the upcoming government decision on gas exports, but could help Leviathan's partners to persuade ministers that gas exports strengthen Israel's regional geopolitical position.

Two months ago, Leviathan's partners - Noble Energy Inc. (NYSE: NBL), which owns 39.66% of the field, Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L), which each own 22.67%, and Ratio), which owns 15% - asked Gilo for an exemption to jointly market gas from the field. His response last week was, in the professional jargon "No action". He gave provisional permission to open talks with Turkey, Jordan, and the Palestinian Authority, without the Antitrust Authority taking any enforcement action against the companies.

In the response, the Antitrust Authority said that the provision permit was only for initial talks, and that it provided no indication about Gilo's final decision on the alleged cartel by the companies. The subject has been under review for two years, since Gilo announced on September 6, 2011, that he intended to declare Leviathan a cartel because of the cross ownership by Noble Energy and Delek in the Tamar, Leviathan, and other offshore gas fields.

"Globes" has reported that in an extreme case, Gilo could order Delek, controlled by Yitzhak Tshuva and Noble Energy to sell their stakes in Leviathan, or he may order separation rules for its management to ensure that each partner hold separate negotiations for its proportionate share of the gas.

Parties involved in the process told "Globes" that Gilo's decision was given on the Antitrust Authority's understanding that of the urgency and strategic importance of opening sales talks with Turkey, Jordan, and the Palestinian Authority. Talks between Leviathan's partners and these countries are of interest to the US administration, and came up during Secretary of State John Kerry's visit to the region and during Turkish President Recep Tayyip Erdogan's visit to Washington.

Published by Globes [online], Israel business news - - on June 2, 2013

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

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