The Israel Antitrust Authority today announced that it would ease its requirements for entities cooperating in natural gas exploration. The restrictions to be removed including the obligation to sell or reduce their involvement in the activity of their partner in a gas reservoir, if gas is found in more than one active reservoir, and the ban on the transfer of information between license partners. This removal of restrictions does not apply to "dominant companies in the sector," which include Delek Group Ltd. (TASE: DLEKG) and Noble Energy.
The new measure constitutes a change in the policy that prevailed until recently. For example, in October 2013, the Antitrust Authority decided to make the transfer of 10% of the rights in the Oz license to Israel Opportunity Energy Resources LP (TASE: ISOP.L) contingent on reducing the company's ability to influence the license if gas is found in both the Gal licenses and its Pelagic or Oz licenses.
The Antitrust Authority also barred Ratio Oil Exploration (1992) LP (TASE:RATI.L) from transferring information about the Mira and Sara licenses to the other partners in the licenses. Now, following the decision rendered in the case of the Pelagic and Oz licenses, acting Antitrust Authority director general Adv. Ori Schwartz wrote, "Cooperative ventures in natural gas exploration between concerns that do not hold rights in the Leviathan or Tamar reservoirs should benefit from an easier regulatory regime that will maximize the possibility of finding a gas reservoir that can compete with the existing monopoly. In general, I therefore see no reason to require them to sell gas reservoirs or reduce their involvement in all or part of any gas reservoirs that they may find."
Schwartz added that requests submitted for cooperative ventures would be handled with urgency, and the permit granted them "is not expected to be contingent on any burdensome conditions."
"This is an essential step for attracting international gas companies to Israel," a senior gas company source said. "A decision by a gas company to enter a country is a strategic decision discussed for months in advance, and sometimes for years. No company will invest huge amounts of money in a country if there are material restrictions on the number of licenses it can hold in them."
The Antitrust Authority adds that in principle, the decision also applies to concerns with more limited involvement in the Leviathan or Tamar reservoirs, and to concerns that are partners of concerns dominant in other reservoirs. "These cases will be examined on an individual basis, but the general trend is to make it as easy as possible to enter natural gas exploration, especially for concerns that are not dominant in the sector and concerns related to them"
Published by Globes [online], Israel business news - www.globes-online.com - on October 11, 2015
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