Israel: Cabinet approves new natural gas agreement

The new gas field development agreement has a stability clause, which is more flexible than the one struck down by the High Court.

The cabinet today approved by a large majority the natural gas plan with a new and more flexible stability clause. The only minister to vote against it was Minister of Environment Protection Avi Gabai. The new clause does not commit future governments. According to the cabinet resolution approved today, the government promises to act in favor of regulatory stability for 10 years in the gas sector, but does not guarantee that nothing will be changed in taxation, ownership of the reservoirs, and exports. In contrast to the previous stability clause, the government will not oppose private members’ bills seeking to make such changes.

“The government recognizes the need for a regulatory environment that encourages investments by international and local companies in oil and gas exploration and production, including the obtaining of the financing required in the sector from local and international financing entities. This environment serves the public interest,” the cabinet resolution states. “The cabinet is therefore seeking to create conditions that will help enhance trust, expedite investments in this sector, promote them, and encourage additional investments in the sector, including the entry of new investors.”

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