Energy Ministry slams Antitrust Commissioner for delaying Leviathan development

Freezing the development of the Leviathan natural-gas reservoir could have serious geopolitical and fiscal implications for Israel, according to National Infrastructure, Energy and Water Ministry director-general Orna Hozman-Bechor.

She wrote a letter to Israel Antitrust Authority commissioner David Gilo on Wednesday night in response to his announcement earlier this week that a proposed consent decree regarding the entry of the Delek Group and Noble Energy into Leviathan would not be submitted to the Antitrust Tribunal for approval.

Arguing that “no changes in the circumstances have been presented to justify the move,” Hozman-Bechor stressed that the changes could cause “significant and fundamental harm to the energy sector in Israel.”

The proposed consent decree that Gilo elected to scrap on Tuesday would have enabled the Delek Group and Noble Energy, the principle partners in the Leviathan and Tamar gas reservoirs, to remain in the basins without being defined as a cartel. Instead, they would be required to sell their smaller nearby reservoirs Karish and Tanin.

“It has recently become clear to the Antitrust Authority that the proposed consent decree cannot be justified under the standards of the Antitrust Law due to a number of new circumstances,” the authority said Wednesday night. “In particular, the authority has received strong indications that the proposed consent decree will not produce a truly competitive environment that would solve the problem of the existence of a monopoly. In addition, the authority is concerned that government officials are putting their hope in the proposed consent decree and are awaiting its results rather than taking action immediately to further encourage competition.”

Already in November 2012, Gilo declared that the partners in the Tamar reservoir have a monopoly on the supply of natural gas in Israel. Although monopolies are subject to special restrictions, such as prohibitions on reducing competition or setting exorbitant prices, they are legal entities, according to the authority. Continue reading…

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