Energy minister approves Karish and Tanin boundaries

Leviathan

Italy's Edison and other European and US energy companies are interested in buying the fields from Delek and Noble Energy.

Delek Group Ltd. (TASE: DLEKG) energy exploration units Delek Drilling Limited Partnership (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L) report that Minister of Energy Silvan Shalom has accepted the recommendation by the Petroleum Council to approve the change in the boundaries of the Karish and Tanin gas fields. The two fields will receive new boundaries and be registered as gas discoveries. This removes one of the regulatory obstacles to the $6.5 billion development of the Leviathan reservoir.

As a result of this change in boundaries and the sale of Karish and Tanin, Antitrust Authority director general David Gilo will grant Noble Energy Inc. (NYSE: NBL) and Delek Group, owners of the rights to the Tamar and Leviathan fields, an exemption from being a cartel, thereby paving the way to developing Leviathan.

Last March, Gilo published the order requiring Delek and Noble to sell their rights in Karish and Tanin to allow more competition in the Israeli natural gas market. Gilo ruled that such an arrangement was preferable to a court battle to force Noble and Energy out of Leviathan, and which would delay the field's development for many years. Selling Karish and Tanin would allow a new player to enter the field and provide 50% of Israel's domestic natural gas needs for 16 years.

The Tanin and Karish fields together contain between 60 and 80 billion cubic meters of natural gas in which NIS 700 million has so far been invested, Avner Chairman Gideon Tadmor reported several months ago.

Interested buyers for the two fields include Italy's Edison S.p.A (BIT. EDN), and other European and US energy companies.

Published by Globes [online], Israel business news - www.globes-online.com - on November 20, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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