Chevron blocks Israel Electric - Tamar gas deal

Tamar

Other Tamar partners say Noble Energy, now owned by Chevron, is a monopoly that prefers to sell gas from Leviathan, in which it has a higher stake, and has a higher priced agreement with IEC.

Tamar offshore gas field operator Noble Energy, which is now fully owned by Chevron Corp., has decided not to sell gas to the Israel Electric Corporation (IEC) (TASE: ELEC.B22) as part of the new agreement signed earlier this week. The new agreement was signed with Tamar partners Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), Tamar Petroleum (TASE: TMRP), Everest Infrastructure, and Alon Natural Gas Exploration Ltd. (TASE: ALGS), who unlike Noble Energy and Delek Drilling LP (TASE: DEDR.L) do not also have a stake in the Leviathan offshore gas field.

This latest deal allows IEC to buy gas at a price about 10% lower than the $4.80 per MMBtu (million British thermal units) that it agreed in a previous deal with the Leviathan partners and reopened competition between the two large gas reservoirs. The new agreement will also cut electricity bills by several percent. But Chevron (Noble Energy) and Delek Drilling want to prevent the IEC from buying the Tamar gas be3cause it is cheaper and they have a smaller stake in the Tamar field.

The Tamar partners (minus Delek and Noble) have protested to Israel Competition Authority head Michal Halperin. They wrote, "The refusal is unreasonable because there is no dispute that the Tamar field can supply gas to the IEC in operational terms and the only reason for the refusal is a conflict of interests in which Noble is operating due to its preferred holdings in the Leviathan field. The aforementioned conduct by Noble is using improper power as a monopoly in the natural gas sector and in contravention of the instructions of the Competition Law."

The Tamar partners asked Halperin to exercise her powers to instruct Noble Energy to immediately supply gas to the IEC under the agreement signed.

Published by Globes, Israel business news - en.globes.co.il - on October 7, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

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