Israeli media have reported that U.S.-based Noble Energy and Israeli partner Delek Group have reached a preliminary deal with the Israeli government that would allow them to move forward on the development of the massive offshore Leviathan gas field.
At stake is a massive gas field worth $5-$6 billion and believed to contain some 17-22 trillion cubic feet of gas, slated to begin extraction by 2019.
The massive Leviathan gas field was discovered by Noble in Israel's offshore Levant Basin over six years ago, but its development has been halted by red tape.
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In late March, the Israeli High Court moved to stop development indefinitely if a clause in the country's natural gas rules was not changed or voided. At issue is a 10-year guarantee that the Israeli government gave Noble and Delek for Leviathan.
The court held that the government did not have the right to make a concession of this length to the partners. The partnership between Noble and Delek had also raised doubts about a budding energy monopoly that has resulted in legal opposition to the project's approval and a series of delays.
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Representatives of Noble and Delek have now reportedly consented to a compromise with Israeli officials for a new partial regulatory stability clause that would allow future governments room for exercising judgment concerning changes in natural gas policy.
It's not a done deal yet. It still requires Cabinet approval, which is expected in a matter of days, according to Israeli media.
Due the bureaucratic headaches and company's need for cash, the reports merged last month that Noble is seeking to reduce exposure by selling 15 percent of its 40 percent interest in the project.
By James Burgess of Oilprice.com
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