JERUSALEM: Israel’s government said on Thursday it had reached a deal with a U.S.-Israeli consortium on the development of the huge Leviathan gas field and two other offshore wells.
After weeks of talks over the government’s initial proposal in June, the controversial deal will allowTexas-based Noble Energy and Israel‘s Delek Group to keep ownership of the largest offshore field, Leviathan. They are required to sell off other assets, including stakes in another large deposit called Tamar.
“The outline will bring Israel hundreds of billions of shekels in the coming years,” Prime Minister Benjamin Netanyahu told a news conference, saying he will present the agreement to the cabinet on Sunday for a vote.
One change to the initial plan is that the price of gas in the new agreements will be lower, while the developers will also commit to invest $1.5 billion in developing Leviathan in the next two years.
Netanyahu had been adamant in seeking a deal that would allow Leviathan – one of the world’s largest offshore discoveries of the past decade – to be developed. He had faced a coalition crisis over details of the plan on grounds that the government gave into most of the companies’ demands and leave Noble and Delek with too much power since they would control most of Israel‘s gas reserves.
Government officials argued the current deal was the best they could achieve in ensuring there were no further delays in developing the gas field that sits 80 miles (130 km) off Israel‘s Mediterranean coast.
Leviathan, with estimated reserves of 22 trillion cubic feet (tcf) or 622 billion cubic metres, is slated to begin production in 2018 or 2019 and expected to supply billions of dollars of gas to Egypt and Jordan in addition to supplying Israel.
“More gas and oil discoveries await us,” said Steinitz, who urged more foreign firms to invest in Israel. “There is no certainty on this matter, but there is a reasonable chance that further discoveries are waiting to be made.”