Israeli Gas Policy Review Rejects Forcing Chevron Sale, Prioritizes Stability

An inter-ministerial committee, led by Energy Ministry Director-General Yossi Dayan, has released its final recommendations on Israel's natural gas market and energy security. The report confirms previous disclosures that the committee will not recommend forcing U.S. energy giant Chevron to sell its stake in the Tamar or Leviathan gas fields, a move sought by the Finance Ministry and the Antitrust Authority to boost competition.

Energy Minister Eli Cohen stated that the decision to avoid government intervention in the existing ownership structure of the two major gas fields aims to maintain regulatory stability, arguing that any disruption could deter new investors. Committee chair Dayan added that such stability signals Israel as a stable and attractive country for investment, encouraging further exploration to expand gas reserves.

The committee adopted a conservative approach to preserving gas reserves for Israel's future needs. With current proven reserves at approximately 870 billion cubic meters (BCM) and an unproven potential exceeding 1,000 BCM, the committee estimates cumulative domestic demand until 2048 at around 515 BCM. It recommends increasing the required reserve amount from the current 440 BCM.

Assuming sufficient domestic supply until 2048, gas partnerships can continue exports. The committee also advises that if new fields are discovered, the domestic supply obligation should increase accordingly. As Israel has become a gas exporter, particularly to Egypt and Jordan, the committee recommends preparing for a post-natural gas era by developing a national plan to diversify energy sources and considering infrastructure for gas import and storage, treating natural gas as a finite resource.

Recognizing that large new discoveries like Leviathan are unlikely, with future finds estimated around 50 BCM, the committee recommends significant regulatory relief for smaller fields. For fields under 50 BCM, the domestic supply obligation will be reduced to 15% of their capacity, making smaller discoveries economically viable to develop. The Energy Ministry recently held a roadshow in the U.S. for the fifth gas exploration tender, with results expected in about eight months, aiming to attract major international companies like Chevron to enhance competition and maintain attractive electricity prices.