Regulator decides Tamar and Leviathan form monopoly

Noble Energy: Having to sell Tamar or Leviathan influences our continued investment in Israel.

Israel Antitrust Authority head Prof. David Gilo today has told lawyers acting for Delek Group Ltd. (TASE: DLEKG) and Noble Energy Inc. (NYSE: NBL) that he is going back on his decision, subject to a hearing, to let the companies continue holding both the Tamar and Leviathan gas fields. The State will now require the companies to sell their holdings in one of the fields.

Sources in the energy market believe that such a step will delay development of the Leviathan field by several years and could see Israel dragged into the international court of arbitration by US company Noble Energy, which has been developing both fields.

Noble Energy Israel Country Manager Binyamin (Bini) Zomer said, "For 16 years, Noble Energy has invested in the exploration and development of Israel's gas and oil resources. To date we have invested with our partners close to $6 billion in developing the country's oil and gas sector. These investments contribute to the Israeli economy and environment, and at the same time grant Israel energy independence while providing an opportunity for regional cooperation and contributing to regional stability."

He added, "The entry of Noble Energy into the licenses, which then became the Leviathan discovery, took place with the full knowledge and approval of the Israeli government, and subject to the Petroleum Law and all laws. The reservations of the Antitrust Authority regulator over Noble Energy's entry into these licenses, after they were declared a discovery, were without legal basis when first mentioned, and remain groundless today."

Zoma continued, "In an attempt to satisfy the regulator, Noble Energy and its partner, agreed to part from the Tanin and Karish discoveries, which were assets legally and legitimately acquired by them. That agreement was the result of long and exhaustive talks, and in effect allowed speeded up investment in Israel and continued project development in Israel's gas and oil sector."

He warned, "The antitrust regulator's decision to go back on the agreement imposed casts a shadow over the future of Israel's gas and oil sector and influences Noble Energy's continued investment in the country."

Published by Globes [online], Israel business news - www.globes-online.com - on December 23, 2014

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

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