Regulator mulls ordering Delek, Noble to sell Leviathan
Antitrust Authority director general David Gilo is considering ruling that ownership of Tamar and Leviathan constitutes a cartel.
5 March 13 18:23, Amiram Barkat
Within weeks Antitrust Authority director general David Gilo will make a dramatic announcement. After more than a year of investigations, Gilo is due to decide if the stakes of Delek Group Ltd. (TASE: DLEKG) and Noble Energy Inc. (NYSE: NBL) in the Leviathan natural gas reservoir constitute a cartel. If he decides that they do constitute a cartel, then Delek controlling shareholder Yitzhak Tshuva and his American partner will be told to say good-bye to their huge natural gas discovery made in December 2010.
How Delek and Noble Energy will respond can only be guessed at, but one thing is clear: development plans for the Leviathan field will be put on hold, along with agreement to sell 30% of the reservoir to Australia's Woodside Petroleum Ltd. (ASX: WPL), and the grandiose plans to build an Israeli liquefied natural gas (LNG) facility for gas exports.
All these issues would have to wait until the identities of Leviathan's new owners become known and they decide what to do. In the interim, wave of uncertainty will hit the market, and Gilo will become the hero of the hour.
Many energy market sources doubt that he will go all the way, and that he will be satisfied with guidelines ordering Leviathan's partners to independently market their relative share of the reservoir's gas. Perhaps the Leviathan partners will be required to commit only to export their gas and not compete with Tamar gas on the domestic market.
However, signs, clues, and decisions aired by Gilo and his aides, especially in the past few weeks, point to a complete separation between the rights owners in Leviathan and the rights owners in Tamar and other reservoirs.
At an energy conference last month, outgoing Antitrust Authority chief economist Shlomi Parizat said, "We would not dream of permitting the conduct in the oil and gas expl