The controversial stability clause — which freezes taxes and other regulations in the natural gas sector until 2025 — was the reason for the breakdown in negotiations with the energy companies overnight Monday, Globes reported.
Marathon talks adjourned at 3:00 a.m. Wednesday morning after failure to reach agreement on the issue.
The clause has sparked fierce criticism, as it would tie the Israeli government’s hands for years to come, preventing any change in the regulatory scheme regarding taxation, separate marketing and more. According to the draft agreement, “the Israeli government opposes private legislative initiatives in these matters if they ask to implement changes in the sector.”
Noble Energy VP Keith Elliot, who had flown to Israel to conclude an agreement, reportedly left the country on Wednesday.
Minister of Energy Yuval Steinitz acknowledged the stalemate: “To my regret the frantic talks of the inter-ministerial team with the energy companies went aground in the morning hours, and the senior delegation from Noble Energy is traveling back to the U.S. However, it should be said that the milestone issue for the development of Leviathan and agreement on prices have shown certain progress, but on the issue of ensuring stability, conditions were presented to us that we could not accept.”
But, Steinitz added, “Because developing the Leviathan gas field is of vital economic and strategic importance to the state of Israel, the dialogue between the parties will be renewed in the coming days.”
A senior gas company official defended their position, saying that “the stability clause is the only way of ensuring that the fiasco of recent months won’t happen again. Just as they are asking us to meet milestones and be serious in developing Leviathan, so we expect government assurances that they won’t interfere after we’ve invested billions of shekel in developing the field.”
Development of the offshore gas fields has been disrupted due to a dispute over the Antitrust Authority’s decision on a breakup of the monopoly, revoking previous agreements. This has given rise to the companies’ insistence on the stability clause.