* Exports will make up 40 percent of reserves
* Israel will get $60 billion from 20 years of gas sales
By Steven Scheer
JERUSALEM, June 19 Israel said on Wednesday it
will keep most of its newfound natural gas for domestic use but
will still allow enough exports to satisfy exploration companies
seeking access to the global market.
The decision to keep 60 percent of the country's estimated
reserves, which means about 540 billion cubic meters (bcm),
ended months of uncertainty during which drilling groups
threatened they would not continue developing the offshore wells
unless they were allowed significant exports.
"The decision balances between the need to ensure a cheap
and available source of energy for Israelis and the need to
export," Prime Minister Benjamin Netanyahu told a news
conference. "This amount of gas will meet our energy needs for
at least the next 25 years."
Israel will receive $60 billion in taxes and royalties from
the sale of gas over the next two decades, he said.
Energy Minister Silvan Shalom reassured exploration
companies that the export quota "will encourage investors to
develop the gas fields that still need to be developed".
Two of the world's largest offshore fields from the past
decade were found in Israeli waters. Texas-based Noble Energy
led two groups that in 2009 found Tamar, with an
estimated 280 bcm, and a year later Leviathan, with an estimated
Australia's Woodside has agreed to purchase a 30
percent stake in Leviathan, but officials have said the deal
would only be finalised after Israel sets its export policy.
Shares in Israeli exploration companies rose compared to
declines in the broader Tel Aviv market. Avner Oil
closed up 0.7 percent, Delek Drilling gained 1.7
percent, along with Delek Group 0.5 percent, Isramco
1.1 percent and Ratio Oil 0.8 percent.
Wednesday's decision, which will be voted on by the cabinet
next week, was a departure from a recommendation made last year
by a government committee to export more than half of Israel's
That recommendation sparked a months-long debate in which
environmentalists and a number of lawmakers accused the
government of giving away too much of Israel's resources.
Exploration companies lobbied strongly for a larger export
quota, saying the Israeli market alone was too small to warrant
"The decision is good and balanced," said Yaniv Pagot, chief
strategist at the Ayalon Group.
The stakeholders in the gas fields will take a hit with the
new limitation on exports, he said, but added, "this is no