Israel reaches deal with gas companies, paving way to new output

YAACOV BENMELEH

HAIFA, Israel (Bloomberg) -- Israel and the developers of the country’s natural gas fields reached an agreement on a regulatory framework, coming one step closer to resolving a dispute that’s held up production.

The two sides have been wrangling over ownership and pricing of these offshore assets since December, when Israel’s antitrust commissioner considered designating the partnership between Delek Group and Houston-based Noble Energy Inc. a monopoly. That move would have required them to sell stakes in the fields.

The policy outline will be presented to the cabinet on Sunday for approval, Energy Minister Yuval Steinitz said. The accord settled disputes on issues including pricing and milestones for the development of the largest field, Leviathan, according to a text message from his office.

The agreement will “allow for the development of Israel’s oil and gas reserves after a delay of several years,” Steinitz said.

The disputes have held up the production of gas from Leviathan and delayed expanded operations at the smaller Tamar. The failure to implement a gas strategy for the fields in the Mediterranean Sea has complicated export deals and antagonized investors.