State finds Delek Drilling violated Tamar gas agreement

Tamar field Photo: Albatross

Delek Drilling and Noble Energy were found to have a conflict of interest because they can veto Tamar sales deals in favor of selling Leviathan gas.

The Tamar partners will be required to find a new marketing and sales mechanism for the natural gas from the offshore field according to a precedent-setting opinion prepared by an inter-ministerial committee headed by deputy attorney general Adv. Meir Levin, head of the Israeli Competition Authority Adv. Michal Halperin and representatives from the Energy, Finance and Justice Ministries.

The decision was reached after the minority partners in Tamar (Isramco, Tamar Petroleum and Dor Gas) complained that the majority partners Delek Drilling LP (TASE: DEDR.L) and Noble Energy prevented them signing a deal to sell gas to the Israel Electric Corporation (IEC) (TASE: ELEC.B22) from Tamar because IEC was seeking to buy gas from the Leviathan partners at a higher price.

Isramco, Tamar Petroleum and Isramco charged that Delek Drilling and Noble Energy, who were both partners in the Leviathan field where they held higher stakes than in Tamar, had a conflict of interest on the matter and were preventing any Tamar deal.

The inter-ministerial team found that there is an orgal agreement between all the Tamar partners that any marketing and sales deals must be agreed unanimously by all the partners. Levin ruled that such an agreement giving the right of veto to partners who also have an interest in the Leviathan deal is a conflict of interest which violates the government's gas agreement.

The Tamar partners must now formulate a new agreement in which individual partners will not be able to veto any sales deals and Tamar Petroleum, Isramco and Dor will have the right to make their own agreements with energy buyers.

Published by Globes, Israel business news - en.globes.co.il - on September 6, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Tamar field Photo: Albatross
Tamar field Photo: Albatross
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018