Marathon talks, which continued to 3 am, have broken down between the gas developers and the Israeli government regarding the stability clause. Noble Energy VP Keith Elliot , who as reported by "Globes" had flown to Israel to conclude an agreement with the Israeli government on the final issues for developing the Leviathan field, has left the country.
The stability clause has caused enormous public criticism. In this clause the State is committed not to change taxation, separate marketing or other substantial regulations in the gas sector until 2025. In the draft agreement, it is even written that "the Israeli government opposes private legislative initiatives in these matters if they ask to implement changes in the sector." In certain circumstances the government can even extend this commitment to 2030.
Criticism revolved around the fact that this clause ties the hands of future governments. As it looks, the clause will remain in the roadmap agreement, but in recent days the Ministry of Justice has been working on "a batch of improvements" and changing the formula.
The gas companies for their part have agreed to "new ways to limit the price" in the words of a senior member of the negotiating team, and thus set agreed milestones for the development of the Leviathan reservoir. Two agreed milestones are two years after the government approval of the gas outline agreement and after five years. However, the gas companies have not agreed to changes in the stability clause.
A senior representative of one of the gas companies said, "The stability clause is the only way of ensuring that the fiasco of recent months won't happen again. Just as they are asking us to meet milestones and be serious in developing Leviathan, so we expect government assurances that they won't interfere after we've invested billions of shekel in developing the field."
Minister of Energy Yuval Steinitz said, "To my regret the frantic talks of the inter-ministerial team with the energy companies went aground in the morning hours, and the senior delegation from Noble Energy is travelling back to the US. However, it should be said that the milestones issue for the development of Leviathan and agreement on prices have shown certain progress but on the issue of ensuring stability conditions were presented to us that we could not accept."
Steinitz added, "Because developing the Leviathan gas field is of vital economic and strategic importance to the State of Israel, the dialogue between the parties will be renewed in the coming days.
Published by Globes [online], Israel business news - www.globes-online.com - on August 11, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015