Treasury: Events in Egypt won't change Sheshinski recommendations

Top official: On the contrary, Tamar will probably only profit from them.

The uprising in Egypt will not change the Sheshinski committee recommendations and its proposed new tax regime on oil and gas discoveries, said Ministry of Finance officials today. In the wake of growing concern that the Egyptian regime will collapse and the possibility that delivery of Egyptian gas to Israel will be halted or disrupted, calls are beginning to be made that the government should make concessions to Israel's offshore gas exploration companies, in order to expedite the production of gas from the Tamar field, which is due to start only in 2013.

The Ministry of Finance denies any intention or initiative to make concessions for Tamar, or to deviate an iota from the Sheshinksi committee recommendations.

Despite demands by the gas exploration companies, the recommendations did not exempt the Tamar discovery, and the new tax regime will apply to it, albeit with some easements.

"On the contrary, the events in Egypt will only benefit Tamar, since the disappearance of the Egyptian player from the field will leave Tamar as the sole player, which will give it enormous power in the market, including the ability to set higher prices," said a senior Ministry of Finance official.

The Ministry of Finance is monitoring events in Egypt, but refuses to make any official statement, including by Minister of Finance Yuval Steinitz. There appears to be little chance of deviating from the Sheshinksi committee recommendations, in view of the ministry's fierce fight to keep them in full. As for the possibility of helping Tamar by other means, without changing the recommendations, the official said, "The issue never came up."

Steinitz and Accountant General Shuki Oren are currently in the US for the annual Development Corporation for Israel/State of Israel Bonds meeting. Proft. Eytan Sheshinski is also abroad.

Published by Globes [online], Israel business news - - on January 31, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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