The National Resources Administration in the Ministry of Energy and Infrastructure published its annual revenue report on Monday, showing record revenue in 2023 of NIS 2.19 billion from natural gas, minerals, and aggregates royalties. This is 28.8% more than 2022, when the total was NIS 1.7 billion.
The revenue in 2023 was mainly from natural gas: NIS 2.081 billion, 23.8% more than in 2022. The rise stemmed from greater production from the gas reservoirs, and particularly from growth in the quantity of gas exported, the start of production from the Karish reservoir, and a rise in the shekel-dollar exchange rate. NIS 1.19 billion, or 57.2%, of total state revenue from gas and condensates in 2023 was from exports, and the rest from production for the domestic market. Since production began from Israel’s gas fields, state revenues total over NIS 25 billion, of which NIS 12.8 billion is from royalties collected by the Ministry of Energy and Infrastructure and the remainder from the levy on profits from utilization of natural resources and companies tax, collected by the Israel Tax Authority.
The report shows that the quantities of gas exported to Egypt and Jordan grew by 25% last year. The exported gas was used partly to generate electricity for local use, and, in the case of Egypt, partly for liquefaction and export to Europe as LNG. Total production of natural gas was 13.9% higher in 2023 than in 2022. The quantity of gas supplied from the Tamar and Leviathan reservoirs to the local market fell last year, because entry of the Karish reservoir into the market.
"The rise in royalty collection to over NIS 2 billion annually is good news for the Israeli economy, and will directly benefit the citizens of Israel," Minister of Energy and Infrastructure Eli Cohen said. "The dramatic rise in gas exports to Egypt and Jordan shows to what degree the natural gas industry is a strategic asset for the State of Israel, helping to promote regional stability. The recently formed exports committee will examine the question of further growth in gas exports, to, among other places, Egypt, and thence to Europe, and the alternative of a gas liquefaction facility in Israel."
The Israel Union for Environmental Defense (Adam Teva V’Din) said in a statement: "The growth in state revenues from gas royalties that took place last year occurred at the same time as situations in which there was a shortage of gas for the Israeli economy and electricity was produced from dearer and more polluting fuels, for which we paid with our money and our health, as happened in the major breakdown in the supply from Karish in early June 2023.
"Alongside the need to keep enough gas for the Israeli economy for the whole transition period until the switch to low carbon energy based on renewable energy sources, there is also a need to ensure a sufficient routine supply of gas, and in situations of breakdowns or shortage to give priority to internal needs and Israel’s energy security. It is unthinkable that an economic incentive should cause the gas companies to export gas continually and routinely at times of breakdown or shortage, and let the Israeli economy absorb the consequences of the breakdown, while exports carry on as though nothing had happened."
Published by Globes, Israel business news - en.globes.co.il - on February 28, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.