Israel court rules against deal to develop offshore natural gasfields

28 March 2016 (Last Updated March 28th, 2016 18:30)

The Supreme Court of Israel has ruled against a deal between the country's government and a US-Israeli consortium to develop offshore natural gasfields.

The Supreme Court of Israel has ruled against a deal between the country's government and a US-Israeli consortium to develop offshore natural gasfields.

US-based Noble Energy and Israeli partner Delek Group are main stakeholders in the gasfields.

The latest decision gave Parliament one year time to change the plan, and came as a blow to Israeli Prime Minister Benjamin Netanyahu who supported the deal.

If the government does not amend the plan, the natural gas regulatory framework will be canceled.

"It is now up to the Government of Israel to deliver a solution which at least meets the terms of the framework."

Israel's Mediterranean gasfields include the Tamar and Leviathan. Leviathan is estimated to have more than 22 trillion cubic feet of gas and Tamar is estimated to contain around half that.

Noble Energy and Delek Group argued that the stability clause cited in the framework was required for them to make the required investments in order to develop the fields.

The clause gave pricing and regulatory stability to energy companies for a ten-year period.

Responding to the court's decision, Noble Energy chairman, president, and CEO David Stover said: "The court's ruling, while recognising that timely natural gas development is a matter of strategic national interest for Israel, is disappointing and represents another risk to Leviathan timing.

"Development of a project of this magnitude, where large investments are to be made over multiple years, requires Israel to provide a stable investment climate.

"It is now up to the Government of Israel to deliver a solution which at least meets the terms of the framework, and to do so quickly."

In February, Benjamin Netanyahu urged the Supreme Court to allow the country to proceed with development of the offshore Leviathan gasfield in the Mediterranean Sea.

Netanyahu defended a gas agreement himself in the apex court, following filing of petitions by opposition parties and non-government organisations to stop plans to develop the field.