Government revenues from natural gas royalties will consistently grow until 2020 from when they will total NIS 2.1 billion annually according to a forecast from the Ministry of National Infrastructures, Energy and Water Resources' Natural Resources Administration Division of Royalties, Accounting and Economics.
This is quadruple the revenue from royalties in 2013 which amounted to NIS 543 million, and tenfold the royalty revenues of NIS 233 million in 2012.
The forecast includes natural gas royalties, oil and natural quarrying materials such as phosphates and copper (not including royalties from the Dead Sea Works). According to this forecast overall royalties between 2014 and 2020 will amount to NIS 9.7 billion. Natural gas royalties will account for 94% of the royalties received over this period. The Sheshinski Committee kept the rate of royalties from natural gas at 12.5%.
Energy Minister Silvan Shalom said, "The Ministry is working to expand royalty collection to increase State revenues and reduce the cost of living. The special expertise that the ministry has gained allows it to operate the best and most effective control mechanism in natural resources royalties."
According to the Energy Ministry there will be a sharp rise in State revenue from 2018 when gas starts flowing from the Leviathan field. In March, The Petroleum Commissioner issued owners notes for Leviathan requiring the field's operators to develop and produce natural gas from the license area according to a prearranged timetable.
Published by Globes [online], Israel business news - www.globes-online.com - on May 19, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014