Work on Israel’s giant deepwater Leviathan field could be back on track after a new agreement on the country’s oil and gas terms.
Noble Energy, which operates the field, had put forward its revised Leviathan development plan earlier this year. Part of the development plan terms was a 10-year stability clause, which stated that the Israeli government couldn’t impose regulatory changes, such as breaking up monopolies, on the Leviathan partners for a 10-year period.
However, a ruling by Israel's Supreme Court in March, which affirmed Israel's natural gas regulatory framework, didn’t include the stability clause, putting the brakes on the Leviathan project.
Now, the cabinet has agreed new terms which seek to offer stability for Noble and its partners, while giving the state more leeway to change oil and gas policy should it see fit.
Minister Steinitz said: “After working intensively to find a solution, we have succeeded in formulating a suitable alternative to the stability provision, in accordance with the principles set forth by the Supreme Court. Our goal is to create a regulatory environment that encourages private investments.
“I sincerely hope that the development of the Leviathan gas field started in January will now continue according to the original timetables, as set forth in the framework for development. I look forward to Israel opening up its offshore energy resources to further exploration and development with other international energy corporations.”
Delek Group, a partner on the project, noted the government's announcement and said the partnership would continue to work together towards the rapid development of Leviathan, as well as planning an additional extension of the Tamar project production facilities.
Leviathan, one of the largest discoveries in the past decade, was discovered in 2010, and is estimated to contain 22 Tcf of natural gas, although recent estimates have suggested the figure may be lower. The field is in the Mediterranean Sea, some 130km off the coast of Israel in 1600m of water.
In February this year, the Leviathan partners submitted a new plan for the field to the country's authorities that decreased the development cost by some US$1 billion, increased production capacity by 5 Bcm to 21 Bcm annually, and aimed to bringing the project onstream by Q4 2019.
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