MK Dov Khenin (Hadash) turned to Prime Minister Binyamin Netanyahu on Sunday, calling upon the government to refrain from approving the forthcoming deal between Woodside Energy and the Leviathan gas reservoir partners. The Australian hydrocarbon firm was expected to sign a $2.71 billion agreement on March 27 to acquire a 25 percent share of the large natural gas reservoir. Yet by that day’s end, the agreement did not pan out due to a disagreement between Woodside and the Israeli Tax Authority.
Woodside Energy gas field in Australia (Photo: Review of Business Taxation)
Over the weekend, however, Globes reported that a compromise over the acquisition of rights would occur soon. While Woodside originally wanted to its full investment for the acquisition of rights to occur over the course of three years, the Tax Authority favored amortization over Leviathan’s 30-year lifespan, according to the Globes report. “We must not give in to Woodside, which is trying to dictate government policy,” Khenin wrote to the prime minister.
With sufficient hydrocarbon supplies for decades of domestic use and export, Leviathan – located about 130 km. west of Haifa – is estimated to contain about 535 billion cubic meters (18.9 trillion cubic feet) of natural gas and 34.1 million barrels of liquid condensate. At this point, Noble Energy holds 39.66% of the Leviathan field, Delek Group subsidiaries Delek Drilling and Avner Oil Exploration each hold 22.67% and Ratio Oil Exploration owns 15%. If the agreement does take place, Woodside will hold 25%, Noble Energy will own 30%, Delek Drilling and Avner will each own 16.93% and Ratio will hold 11.12%.
Khenin asked that Netanyahu step in to prevent the signing of the deal, in order to enable the government to first approve regulations pertaining to Leviathan that will ensure the public interest. “Decisions on the gas issue are decisions that embody tens of billions of dollars, outrageous sums for which there is no ordinary authority to handle them,” Khenin said. “Such decisions should occur through parliamentary legislation in a manner that is completely transparent to the public, he explained. Determining tax policies on natural gas exports, formulating environmental obligations to apply to the reserves and detailing reservoir rights are all issues that require urgent, informed decisions in cooperation with the public,” Khenin stressed.
“Yet despite this urgency, there is no need for hasty decisions that provide government promises to one gas company or another – let alone a foreign gas company that illegitimately pressured public officials before signing an agreement for a quarter of the gas from the Leviathan reservoir, which according to state law is owned by the public,” he said.
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