Gas Deal Still Stymied by Court Ruling

YERUSHALAYIM -

Predictions that the recent High Court ruling against the natural gas agreement could be quickly circumvented have proved overly optimistic, as parties to the talks admitted to Globes on Sunday that there’s no immediate solution in the pipeline.

A source close to the Ministry of National Infrastructure, Energy, and Water Resources negotiating team said that “Noble Energy came to Israel to find a fairly quick solution, but the situation is more complicated.”

Similarly, a senior source in one of the gas companies confirmed that they were stymied and Noble Energy executives had returned to Houston “rather disappointed.”

Last month, the High Court ruled that the agreement’s stability clause, guaranteeing the companies 10 years of immunity from regulatory change, was unconstitutional. The justices said the deal must be revised and anchored in Knesset legislation, not a cabinet resolution.

But the government denounced the court ruling and Minister of National Infrastructure, Energy, and Water Resources Yuval Steinitz said he was confident that a way could be found around it in short time.

Noble Energy SVP Eastern Mediterranean Region Keith Elliot and Senior VP, General Counsel and Secretary Arnold Johnson visited Israel last week. Together with Delek Drilling senior executives, including CEO Yossi Abu, a series of meetings were held with Steinitz and other officials, including from the Ministry of Justice.

Possible solutions included granting guarantees to the gas companies, or to the banks providing financing, among other things through refining the stability clause or a safety net. Other options lie in the legal sphere, such as formulating a general law including stability for the gas companies or specific amendments, such as in the Petroleum Law.