Energy minister: Foreign cos aren't coming to Israel

Silvan Shalom
Silvan Shalom

Silvan Shalom said that foreign energy companies have interests in the Arab world and bringing them to Israel is no easy task.

"We don't see foreign gas companies coming to Israel," Minister of National Infrastructure, Energy, and Water Silvan Shalom admitted. "The foreign companies have interests in countries like Saudi Arabia and the Gulf, and bringing them to Israel is no easy task. Israel is small country, with a small gas market. In a utopian and theoretical world, companies would come, but that's not how it is in the real world."

"Unfortunately, our business in Israel was unsuccessful, but our connections with Noble Energy have become stronger," Woodside VP Corporate Affairs Roger Martin said at a conference organized by the Ministry of National Infrastructure, Energy, and Water and the Maala organization.

Woodside, which planned to acquire 25% of the rights in the Leviathan natural gas reservoir for $2.7 billion, backed out at the last minute, and left Israel. "We're working together with Noble Energy in Africa, and we signed an additional agreement with them in October for oil and gas exploration off the Cameroon coast," Martin said.

At the conference, which dealt with corporate responsibility in the energy sector, the Antitrust Authority director general's decision to break up the Leviathan monopoly, a decision that created a storm in the gas sector, could not be ignored.

Noble Energy Israel country manager Binyamin Zomer said he was disappointed at the responses that his company had received in Israel, saying, "Our pride in making our contribution to the community was met with cynicism. They tell us cynically, 'This is very American'," Zomer said angrily. "What do you want from me? What's very American? I don't understand this. Since when is doing good considered American? Why should companies in Israel apologize for their success? Of course Noble Energy hoped to make a profit in Israel, but it also meant to do good for Israel."

National Gas Authority director and Ministry of National Infrastructure, Energy, and Water Resources Petroleum Commissioner Alexander Varshavsky asserted that Israel could expect to lose NIS 3 billion annually starting in 2018 from the delay in developing Leviathan. "Beyond that, it's a blow to Israel's credibility," he argued.

Participants in the conference spoke about the benefits of natural gas, which makes it possible to lower energy and water prices, and cuts energy costs for industry. One participant commented, "If you want to talk about responsibility, Israel's responsibility is to bring gas to factories. There are factories in the outlying areas that closed down because of their energy costs. At enterprises like Phoenicia Flat Glass Industries and Shaniv Paper Industry Ltd. (TASE: SHAN), it was a do or die question. Today, they're hooked up to natural gas and saving money. That's the most important thing."

Delek Drilling Limited Partnership (TASE: DEDR.L) chairman and Avner Oil and Gas LP (TASE: AVNR.L) CEO Gidon Tadmor agreed with Zomer, saying that state could expect NIS 250 billion in revenues from the first stage of developing Leviathan. He added, "This revenue doesn't take into account the immediate saving from the consumption of cheap gas. You have to look at the enterprises saved by natural gas. These enterprises are boosting their competitiveness. It's a reduction in the cost of living."

Published by Globes [online], Israel business news - - on February 3, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Silvan Shalom
Silvan Shalom
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