By SARA TOTH STUB
JERUSALEM -- Market worries over the future development of
Israel's energy sector eased Wednesday after government
officials approved the export of 40% of the natural gas from
the country's offshore Leviathan reserve, opening the way for
an inflow of billion of dollars into the economy.
"Today is a lucky day for the state of Israel," said Finance
Minister Yair Lapid at a press conference. "The gas is no less
than a miracle." He added the exports will bring in $60 billion
for the economy over 20 years.
Energy and Water Resources Minister Silvan Shalom said: "It
is the right decision. The country's educational and health
systems...will benefit from it."
The decision, made by a group
of ministers, is expected to get government cabinet approval
next week. Nevertheless, it has its critics. Environmental Protection Minister
Amir Peretz said he is concerned that it jeopardizes Israel's
long-term energy security.
In the last decade, there have been several large gas
discoveries in Israel, including the Leviathan field, which
contains an estimated 19 trillion cubic feet of gas. The export
quota doesn't apply to the smaller Tamar field, which contains
about 9 trillion cubic feet of gas, much of it already
committed to domestic companies.
Before the announcement, there was some fear in the market
that if Israel didn't grant permission to export a significant
amount of gas, the few foreign firms working here -- that have
been instrumental in developing the industry -- would
"This announcement means foreign companies can go ahead with
the development of the Leviathan field," said Steven Shein, a
trader at Psagot Investment House in Tel Aviv.
Australia's Woodside Petroleum recently signed an agreement
to acquire a 30% stake in Leviathan. The other major foreign
player in Israel's emerging natural gas sector is Houston-based
Noble Energy, which holds large stakes in the Leviathan, Tamar
and other fields.
The gas, and the potential for exporting it, has been
exerting upward pressure on the Israeli currency, the shekel,
lately. The central bank lowered the interest rate twice in
May, once in an unscheduled move, to try to weaken the
The bank also announced it would buy $2 billion on the open
market in the next 6 months to try to weaken the shekel. A
shekel that is too strong could hurt Israel's export-dependent
economy by making its products less competitive abroad, the
bank has said.
Dow Jones Newswires