REUTERS - Israel's energy minister said on Tuesday two natural gas firms operating the country's largest offshore fields would have to sell some acreage to avoid being deemed a monopoly, reinforcing comments from the antitrust authority.
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Silvan Shalom's remarks were the most explicit in public since Israel's antitrust authority said in December the partnership between Texas-based Noble Energy and Israel's Delek Group might constitute a monopoly.
The two firms discovered the large Tamar and Leviathan fields in Israeli waters in the eastern Mediterranean in 2009 and 2010, turning import-dependent Israel into a potential energy exporter. They are the main shareholders in both fields.
The regulator's comments jolted the firms, which said they were deferring further investment until matters became clearer, throwing off development timelines and endangering export deals.
Shalom said the government was working to find a balance between increasing competition and ensuring Tamar and Leviathan were developed.
"Part of the decision will be that the gas companies will have to give up some of the reserves they have... It will happen," Shalom told an energy conference in Tel Aviv.
But he acknowledged political factors meant it would not be easy to attract new investors, given many large foreign companies already had operations in Arab states that did not have good ties with Israel.
"The Israeli market is a small market. And the interests they have in Saudi Arabia and the Persian Gulf states... are much bigger... So to bring them here as competitors to other groups is not simple," he said.
Delek, which owns stakes in the fields through subsidiaries Delek Drilling and Avner Oil, said it was cooperating with the regulators in order to get Leviathan's development back on track.
"There is a window of opportunity that is very, very small... a real window of opportunity to find a longer-term solution," Gideon Tadmor, chairman of Delek Drilling and CEO of Avner Oil, said at the conference.
Noble and Delek have already agreed to sell their licenses to two smaller gas fields nearby. Officials have said other options being discussed are splitting up the consortium so the partners sell gas as competitors, or selling stakes in either Tamar or Leviathan.