Israeli Regulator Delays Monopoly Decision On Natural Gas Fields


JERUSALEM, Feb 24 (Reuters) - Israel's competition regulator has delayed a decision on whether to declare the country's natural gas fields a monopoly for two months to allow time for an agreed solution to be reached.

Noble Energy and Israel's Delek Group own 85 percent of the large Leviathan gas site off the Mediterranean coast, and also control the nearby Tamar well -- a situation anti-trust Commissioner David Gilo in December said created a monopoly.

The Anti-Trust Authority said on Tuesday it had given a deadline of April 23 for the sides to reach a deal before charging the companies with restraint of trade. Analysts had been expecting a decision in the next week or two.

The delay follows a proposal from a number of government regulators made last week that all of Israel's major gas fields should be owned separately.

Delek and Noble would still be allowed to control Leviathan. But gas from Tamar slated for Israeli consumers would need to be sold to a third party to compete with Leviathan and two smaller sites, Tanin and Karish.

The delay was "in light of the willingness of government ministries and the parties to work towards a solution to the competition problem," the authority said in a statement, adding joint teams were working to solve the matter and that there had been considerable progress in negotiations.

Leviathan is one of the world's largest offshore gas finds to be made in the last decade, with an estimated 22 trillion cubic feet (622 billion cubic metres) of reserves. Production had been expected to begin in 2018 following an initial investment in the development of around $6.5 billion.

Tamar was discovered in 2009 and started producing nearly two years ago from reserves estimated at some 10 tcf (280 bcm).

These finds turned import-dependent Israel into a potential energy exporter.

The share prices of Delek's two gas units -- Delek Drilling and Avner Oil and Gas Exploration -- were down 3.6 to 4.1 percent in late trading in Tel Aviv.

Earlier this month, Energy Minister Silvan Shalom said Noble and Delek would have to sell some reserves to avoid being deemed a monopoly and that the government would work to find a balance between increasing competition and ensuring Leviathan and Tamar were developed.

(Editing by Mark Potter)


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.