In a potential stroke of good news for Noble Energy, the Director General of the Israeli Antitrust Authority, David Glio, announced his resignation on 25 May. However, Glio will remain in his role until August.
Glio’s resignation is notable as he served as the main opposition to Noble Energy’s plans for the giant gas field Leviathan. He had previously requested that Noble and its partners, Delek Group, sell interest in the producing Tamar field in order to maintain interest in Leviathan, due to monopoly concerns in the region. Due to those uncertainties in the region, Noble Energy announced in late February that it would suspend any further investments in the expansion of Tamar, and initial development of Leviathan until regulatory issues are resolved with Israel.
Glio said, in the announcement on his depature, that he opted to resign because he believes the government, and its offices (Ministry of Finances, Ministry of Energy) are pursuing a plan for the natural gas sector that will not lead to competition, and does so at the expense of the Antitrust Authority’s independence as an organization.
In response to his resignation, Glio said: “I have always believed that the right course of action is to arrive at a competitive solution together with the natural gas companies and without resorting to the court system. This is due to the threat of the gas companies not to develop the gas fields if I turn to the courts. Last December, I arrived at the conclusion that the draft of the consent decree that had been formulated would not lead to competition and therefore I decided not to submit it for approval of the court. I welcomed the participation of the other government ministries in the common effort to arrive at a more competitive solution.”
He continued: “In addition, this is an issue that is likely to have far-reaching implications that go beyond competition, such as foreign relations, security and energy independence. These implications lie at the heart of the genuine concerns of the other government ministries. Therefore, I do not feel that it is appropriate or correct that a regulator who is responsible for competition should take unilateral steps that are unanimously opposed by the other government ministries and without any backing from them.”
The problems began in December when the Israeli Antitrust Authority said it would not submit the consent decree that had been previously agreed upon earlier in 2014. The original terms included the divestiture of the nearby Tanin and Karish gas fields. Noble had anticipated that the first phase of development at Leviathan would be approved in 2014, and called the original decree a key component of the final investment decision for Leviathan.
Leviathan is Noble Energy’s largest exploration find with an estimated 22 Tcf of gross natural gas resources. The Leviathan project is located on the Rachel and Amit licenses offshore Israel in 5550ft of water. Noble had anticipated that the first phase of development at Leviathan to be approved in 2014. The initial development plan for Phase 1 of the field was estimated to be US$6.5 billion.
Noble Energy operates Leviathan with 39.66% interest. Its partners include Delek Drilling (22.67%), Avner Oil Exploration (22.67%), and Ratio Oil Exploration (15%).
Tamar, formerly the largest deepwater conventional gas discovery when it was found back in 2009, is thought to contain gross mean resources of 10 Tcf of natural gas, as of 2013. The field went into production in 2013.
Noble Energy operates Tamar with 36%. Its partners include Isramco Negev 2 LP (28.75%), Delek Drilling (15.625%), Avner Oil Exploration (15.625%) and Dor Gas Exploration (4%).
Image: Tamar field
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