The U.S. independent oil and gas company Noble Energy together with Israeli Delek Group will be allowed to keep control of the giant natural gas deposit in the Mediterranean, the Leviathan field.

According to Jerusalem Post, the Israeli security cabinet on Thursday unanimously voted in favor of an arrangement to allow the U.S.-Israeli consortium to keep hold of the huge gas asset. However, they might be forced to sell some other, smaller assets.

The Leviathan development has been stalled since last year, after the Israeli State Authority declined to give its approval.

“The security cabinet, today unanimously decided that, at this time, it is of decisive importance to move quickly to develop and expand the natural-gas fields that have been discovered off Israel’s coasts, out of concern for state security and the foreign relations of the State of Israel,” a statement from the Prime Minister’s Office said, Jerusalem Post reported.

The draft arrangement brought yesterday is subject to the government approval.

While details on the new arrangement are yet to be publicly released by the Israeli authorities, Reuters has reported, citing industry sources, that Delek will have six years to sell its entire 45.32 percent stake in Tamar, and Noble will have to lower its stake to 25 percent from 36 percent.

This decision is in contrast with the stance of David Gilo, the Israeli Antitrust Authority’s director, who recently branded the consortium a monopoly, as they own Israel’s most important gas assets, the Tamar and the Leviathan. The Anti-Trust Authority is responsible for enforcing the law regarding government intervention to maintain appropriate levels of competition in the economy.

Lack of competition?

Gilo who has offered his resignation effective August 2015, speaking at at the Annual conference of the Israeli Institute of Energy last month said the arrangement on the Leviathan dispute taking shape would not lead to competition, but a monopoly.

“The main problem with the arrangement taking shape is that Noble will continue to be the owner of 25 percent of Tamar. This means that Noble will take part in commercial negotiations and in the setting of the price and commercial conditions for all of Tamar’s customers. Since Noble also holds about 40 percent of Leviathan, this will create a situation in which Tamar will not want to compete with Leviathan.

“In addition, since Noble holds 25 percent of Tamar, the incentive for Leviathan to compete with Tamar is also small. Accordingly, competition cannot be expected between the large fields. “

“Essentially, we are in a situation in which we have demanded competition and the monopoly supplier has told us to decide: if you insist on a healthy level of competition then I will not produce the gas. So choose: either gas or competition. But we want to say to them that we want both natural gas and competition, that the Israeli consumer deserves both natural gas and a competitive natural gas market. “

“Competition is important not only to disperse control of a natural resource that is so important to the public, and not only in order to prevent a situation where one entity controls the flow of natural gas and also has significant holdings in both of the large fields. Competition is important first and foremost because it is expected to lower the price of natural gas. Lowering the price of natural gas will significantly shrink our electricity bill and the price of all goods sold in Israel.”

Source: www.offshoreenergytoday.com

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