PM Supports Increasing State Take of Natural Gas Profits

Many had feared Netanyahu would allow the Sheshinski recommendations to sink, or gnaw at the numbers in favor of the so-called 'gas tycoons.'

After two weeks of stretching his finance minister's nerves to breaking point, Prime Minister Benjamin Netanyahu yesterday unequivocally endorsed the Sheshinski report. Meanwhile, Finance Minister Yuval Steinitz has marshaled a cabinet majority for the Sheshinski recommendations, which boil down to increasing the state's take of profits from producing natural gas from the current 30% to between 52% and 60%, albeit well after the explorers regain their investment.

Even as the crunch approached, the pressure from the gas exploration companies did not abate. Yesterday energy and real estate magnate Yitzhak Tshuva visited the prime minister for the second time in a week, presumably hoping to sway him against the Sheshinski report, which had been delivered at the start of the year by the panel headed by economist Eytan Sheshinski. But Steinitz's main concern hadn't been about the local gas powers, vocal as they were. He was more worried about the pressure from Washington, spurred by the American company Noble Energy, which is partnered with Tshuva's energy group Delek in the exploration endeavors.

Netanyahu had seemed to be passing his second stint as prime minister as unobtrusively as possible, even refraining from goading the left. Many had feared he would allow the Sheshinski recommendations to sink, or gnaw at the numbers in favor of the so-called "gas tycoons." The committee itself had pulled back from its initial recommendations, delivered in its interim report in November. But any sour expectations that Netanyahu would take a middle road, softening the numbers in favor of the companies, were pleasantly dashed.

"I consulted, studied and weighed [the issue], and now the time has come to decide," Netanyahu told the closing session of a conference of ministry directors general. The Sheshinski report achieved "the correct balance between the needs of the state and of the investors," Netanyahu said, explaining that he had reached his decision after long deliberation and meetings with ministers, experts and business representatives.

From discussions Steinitz held with his cabinet colleagues, it seems that 16 of the 27 ministers who will vote on the recommendations will support them. The Yisrael Beiteinu ministers will vote against, as will Environment Minister Gilad Erdan of Likud. Support is also expected from the four Shas ministers. Most of the members of Defense Minister Ehud Barak's breakaway Atzmaut party are expected to support Sheshinski. Barak himself will vote in favor.

With reporting by Sami Peretz, Meirav Arlosoroff, Moti Bassok, Zvi Zrahiya and TheMarker Correspondents