Israeli lawmakers approved a framework agreement regulating how Noble Energy and its partners can develop two massive offshore gas fields, but further action may be needed before work on the projects can begin.
The Knesset approved the controversial deal in a 59-51 vote Monday, clearing a key hurdle toward green-lighting development.
However, they did not take action on a plan to transfer power from an economy minister overseeing the contracts to the cabinet. Arye Deri has said he refuses to support a development deal that drew the ire of the former antitrust commissioner unless another commissioner is found who supports the arrangement, according to reports in the Israeli press.
Noble in a statement Monday applauded the Knesset vote and urged the government to quickly clear all remaining barriers to development.
“When the government follows through on the framework, we anticipate being in a position to negotiate gas sales contracts, rebuild our project and execution teams, secure necessary construction agreements with our suppliers and secure external financing necessary to enable a final investment decision,” Noble Energy said in a statement.
Once it makes that decision likely by 2016, the Houston-based oil company said construction and field development should take three or four years.
Under the deal approved by the Knesset, Noble would have to sell down its stake in the Tamar field to 25 percent within six years and would also see the price of its gas capped for domestic customers, the Times of Israel reported.
“The framework addresses the government’s concerns, including resolution of anti-trust matters, and provides the stable environment necessary for investment to resume and assets to be developed,” Noble said in a statement.
Years after discovering the Tamar and Leviathan natural gas fields off Israel’s coast, Noble halted all investment in the country late last year after Israel’s antitrust commissioner questioned whether the company and its Israeli partners held too much control over the country’s newfound bounty. Noble has been working with Israeli lawmakers for months to hammer out an arrangement allowing it to press forward with its plans.
The negotiations took on a new urgency last week after Italian oil company Eni announced that it had discovered a “supergiant” gas field offshore Egypt that could undercut Israel’s plans to sell its gas to its energy-hungry neighbor.
Noble said it remains confident it will be able to still sell gas to Egypt and other nearby countries, and it remains in talks with potential customers throughout the Middle East.
In addition to the gas unlocked from Eni’s massive find, all of which is expected to be consumed by Egypt, the country could still need 4 billion to 5 billion cubic feet per day of Israeli gas for domestic use, liquefied natural gas exports and for industrial purposes, Noble said.
“We believe the large regional demand — including in Israel, Jordan, Egypt and Turkey — is such that no single one of the region’s discoveries can fill it,” Noble said in a statement. “And there is a significant export market to Europe as well.”