Israel’s economy minister Aryeh Deri stepped down Sunday, allowing Prime Minister Benjamin Netanyahu to greenlight a massive gas deal with U.S. energy giant Noble Energy, according to reports.
Netanyahu announced that the ministry will be transferred to him allowing him to sign off on the deal that seeks to exploit offshore gas reserves in the eastern Mediterranean. The deal had come to a standstill after the country's anti-trust authority warned last year that it could give Noble and its Israeli partner Delek Group an effective monopoly.
"Minister Deri announced to me his intention to quit. In order to proceed with the (offshore gas) agreement the ministry will be transferred to me and I will give the green light” on a deal outline with an energy conglomerate to develop offshore gas fields," Netanyahu said Sunday, according to reports.
Deri's resignation marks the second high-profile exit over the controversial deal this year. The country’s antitrust commissioner, David Gilo, resigned in May to protest the deal. Gilo reversed his approval to the project last year, drawing the ire of investors who criticized him of jeopardizing the investment, according to a Reuters report.
The Gas Find That Wasn't
Israel has run into several bureaucratic delays in its attempts to develop the Leviathan offshore gas fields since its discovery in 2010 by Texas-based Noble Energy and Delek.
Israeli policymakers, unprepared for the size of the gas find, reportedly rushed to ramp up taxes against the companies' future profits as the companies already had a monopoly over Israel’s smaller Tamar gas field.
The move prompted the two companies to pull back from developing the Leviathan field, and threaten to take Israel to international arbitration in Switzerland, according to reports.
In October, Israel drafted and approved a new regulatory framework designed to alleviate anti-trust concerns of foreign energy companies but was reportedly held up by Deri who was unsure of the reforms. On Oct. 25, Deri told Netanyahu that he would not use his ministry’s legal powers to award the deal special exemptions from Israel's anti-monopoly regulations.
The impasse was the result of Deri's concerns about providing such exemptions that could not be overlooked by Netanyahu as the support of the former's party is crucial to Netanyahu’s right-wing coalition government, according to Reuters. However, Deri’s resignation now clears the path for the prime minister who has signaled that he is ready to make up for lost time on the gas field project.
"Deri's resignation and the transfer of his authority to the Prime Minister could move the gas plan forward and avoid a legal battle with Noble Energy," Mona Sukkarieh, an analyst at the Middle East Strategic Perspectives risk consultancy, told Agence France-Presse.