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Socialist Regulatory Zeal Kills Israel’s Off-Shore Energy Exploration Future

Globes Israel Business Arena has two stories about the tawdry state of affairs regarding the stop in Israeli offshore energy exploration and development. The first, “Antitrust uncertainty deters oil cos from coming to Israel” explains why 100 companies in the international oil patch won’t think twice about doing business in Israel’s Exclusive Economic Zone:

Israel Oil and Gas Exploration Industries chairman Uri Aldubi says 100 companies contacted refused to come to Israel.

“Doing business in Israel has thereby become nonviable for the few operators who considered coming here,” he complained. Finally, in his letter, Aldubi accused the regulators in Israel, including the Antitrust Authority director general and the Ministries of Finance and National Infrastructure, Energy, and Water Resources, of responsibility for the companies “halting their development processes for lack of an alternative, and many workers who could have been employed have been fired or not hired.”

The second illustrates, what happens when  the you don;t honor contracts with existing developers on royalty splits, “Delek, Noble Energy sue state over royalties.”

Delek Group Ltd. (TASE: DLEKG) and U.S. company Noble Energy are suing the State of Israel for NIS 58 million, sources inform “Globes”. According to the statement of claim, a few months ago the state charged the companies tens of millions of shekels for royalty differences from the Tamar natural gas reserve. The companies have now decided to sue the state for the return of their money plus interest

All because Dr. David Gilo director general of Israel Antitrust Authority reneged a deal with the Houston based Noble Energy and Israeli partner Delek Drilling Partners who invested Billions to bring offshore gas fields on stream. By not honoring an agreement this Ralph Nader wannabe has screwed the pooch on a major source of royalties and taxes estimated at over $60 billions to fuel economic growth create jobs and income as well provide revenues for defense and social programs.

This is what you can expect from an ally of Zionist Union leftists. Now Noble Energy Delek Drilling are suing the State over royalties from  the Tamar field they brought on stream to fuel Israel’s energy development.

This is what you get when state contracts are not honored and socialists regulate capriciously.

EDITORS NOTE: This column originally appeared in the New English Review.