State Comptroller: We'll deepen gas inquiry


State Comptroller Joseph Shapira told the Knesset State Control Committee he would further investigate the agreement with the gas companies.

"This report will not disappear from the agenda. We will continue to monitor the matter daily," State Comptroller Joseph Shapira said in a session of the Knesset State Control Committee today on the State Comptroller's report on the development of the natural gas industry that was released yesterday. "The gas agreement reached us at short notice. The report refers to it briefly, but not in full. We will deepen our investigation into the agreement and examine how things were done in the corridors of the Knesset and in the government," Shapira said, referring to the agreement reached recently by the Israeli government with gas exploration companies Delek Group Ltd. (TASE: DLEKG) and Noble Energy (NBL) that is meant to regulate their activity in view of their monopoly position.

In the report published yesterday, the State Comptroller criticizes the government's conduct in relation to the natural gas industry in recent years. All government agencies concerned come in for criticism. The State Comptroller says government policy was deficient, not thought through, drove away investors, contributed to the formation of a gas monopoly, and ultimately harmed the interests of gas consumers.

The end result, the State Comptroller finds, is that the team led by National Economic Council head Eugene Kandel came to the negotiations with the gas companies in a weak position. He therefore proposes that the regulatory regime for natural gas should include price controls and enforcement mechanisms.

A divisional manager at the State Comptroller's Office, surveying the report, told the committee, "A monopoly has been created, a strong monopoly. Today, there is one gas supplier. There is only one pipeline, with a limited capacity, and there is no strategic storage reservoir. There is also an intention to allow the export of gas from the Tamar reserve. There is a risk that is something happens to the reserve or to the pipeline, the State of Israel will be in a difficult position. 60% of the power production in Israel already uses natural gas, and the proportion will rise to 70%.

"The question arises, how did we get into this situation, and the picture that emerges is a dismal one. There is no coordination, no orderly, comprehensive staff work converging on a solution both in the interest of development of the natural gas industry and in the interests of the consumers. I will also add that as far as we are concerned, the partners, Delek and Noble Energy, are not enemies of the state, and their investment should be welcomed, but the right balance has to be found."

Published by Globes [online], Israel business news - - on July 21, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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