Israeli Court Blocks Gas Deal
March 28 2016 - 3:02AM
Dow Jones News
(FROM THE WALL STREET JOURNAL 3/28/16)
By Orr Hirschauge and Rory Jones
TEL AVIV -- Israel's Supreme Court on Sunday ruled against a
landmark deal to develop and export the country's offshore gas
reserves, a setback for Prime Minister Benjamin Netanyahu, who
campaigned for it.
The panel of judges called the deal unconstitutional, citing a
clause in its framework that gave energy companies pricing and
regulatory stability for 10 years regardless of potential shifts in
the government.
The main stakeholders in the fields, U.S.-based Noble Energy
Inc. and Israeli partner Delek Group, had argued that the stability
clause was required for them to make the investments necessary to
develop the fields.
The deal will be suspended for one year, the court said. Mr.
Netanyahu's government will be required to amend it during that
period and potentially put the details to a vote in the Israeli
parliament.
The companies have already been through several rounds of
regulatory and legislative hurdles. Israel sits on fields with more
than 32 trillion cubic feet of gas.
"The supreme court's resolution severely threatens the
development of Israel's gas reserves. Israel is seen as a country
with exaggerated legal interference that makes doing business
hard," Mr. Netanyahu said on his official Twitter account. "We will
seek alternative ways to overcome the serious harm inflicted on
Israel's economy by this hard to understand resolution."
Delek and Noble issued a joint statement with other companies
involved. "In its resolution the court accepted the framework in
whole, opposing only the stability clause. We congratulate such a
resolution," it said. "We call upon the government to put into
place terms that include stability in a timely fashion."
Thousands of Israelis protested the deal in the past year,
complaining it would line the coffers of big business, offer
Israeli consumers uncompetitive pricing compared with other Western
countries, and send too much gas outside Israel, an energy-security
risk.
(END) Dow Jones Newswires
March 28, 2016 02:47 ET (06:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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