Noble Energy Calls Israeli High Court Natural Gas Ruling 'Disappointing'

CEO says that now the court has nullified a cabinet resolution promising Noble and its partners regulatory stability, it is up to the Israeli government to find a solution.

Reuters

The CEO of Noble Energy, the Houston-based company that is a leading player in the consortium that has been developing Israel's two largest offshore natural gas sites, expressed disappointment at Sunday's High Court decision striking down a provision of the Israeli government's policy gas policy framework.

The provision, which was voted on by the cabinet but not enshrined in Knesset legislation, promised Noble and its partners regulatory stability in the gas sector for at least ten years. A commitment “that binds the government to the framework, including no changes in legislation and opposing legislative initiatives for 10 years, cannot stand,” the court said in its ruling. 

"The Court's ruling, while recognizing that timely natural gas development is a matter of strategic national interest for Israel, is disappointing and represents another risk to Leviathan timing," Noble Energy's Chairman, President and CEO, David Stover said in a statement. "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.

"Noble Energy has consistently maintained that stability is a minimum condition for project development, and our position has not changed. As we have stated before, we will vigorously defend our rights related to our assets to protect shareholder value."

Stover did not relate to the HIgh Court decision as grounds for walking away from the Leviathan project and added: "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." The court gave the government a year to correct the legal deficiency in its plan.

The court’s decision also drew a sharp rebuke from Prime Minister Benjamin Netanyahu and others in the government. “The High Court of Justice decision severely threatens the development of the gas reserves of the State of Israel,” Netanyahu said in a statement. “Israel is seen as a state with excessive judicial interference in which it is difficult to do business We will seek other ways to overcome the severe damage that this curious decision has caused the Israeli economy.”

The framework is an agreement reached last year between the government and the companies that control Israel’s gas reserves – led by Noble Energy and Israel’s Delek Group – setting out the final terms for governing the industry, mainly in regard to antitrust provisions.