Offshore gas drilling site
Photo: Albatross

Steinitz: Natural gas profits belong to people

Finance minister demands more royalties from new offshore drilling site be paid to state treasury

Finance Minister Yuval Steinitz said gas companies should not be the only ones profiting from natural gas deposit found off Israel's coast.


"It is fitting for these discoveries to belong to the Israeli people. I will make sure that all of Israel benefits from this," he told the weekly cabinet meeting Sunday.


Steinitz said he had informed Noble Energy, which leads a consortium that including a number of Israeli partners drilling for natural gas, that a government-appointed committee would continue to pore over the issue of royalties.


"I reject claims that if Israel behaved clumsily and negligently for 62 years, it must continue to do so next time," he said.


An official familiar with the case said the committee was looking into raising the royalties retroactively, so that the population could enjoy benefits afforded by the discovery of the offshore gas deposit.


"The case of collecting royalties from the Leviathan drilling is not the same as the case of Tamar and Dalit," he said, referring to the drilling sites.


Steinitz told the committee that Israel should not maintain lower royalties than the rest of the world. "These are especially large and important discoveries," he said.


"These discoveries only strengthen the need for a committee to examine the system of incentives given to investors, as well as the amount of taxation and royalties which will eventually be put into the state treasury."



An element from the gas partnership stated in response: "The licenses for gas and oil searches were issued by the State under explicit conditions according to which the entrepreneurs were responsible for any risks in the investments of billions of shekels. It should be noted that there were some 500 previous drills which yielded nothing and caused massive losses in funds.


"It is unacceptable that with the news of the latest test results which suggest significant potential for new discoveries, a committee should discuss the option of retroactively changing the rules of the game and creating uncertainty and instability among all the investors, primarily the foreign investors.


"It is important to bear in mind that the American partners invested massive amounts of money in the State of Israel against all odds at a time when no one wanted to invest in Israel due to the Arab boycott."


The statement further noted that Israel's royalties were no lower than any other country, and that hundreds of millions had already gone into the project. "It is unacceptable for a country which honors buyers' rights to change the rate of royalties regarding purchased rights which have already been invested in," the statement said.


פרסום ראשון: 06.07.10, 09:04
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