Noble Energy Says Israel Court's Stability Provisions Ruling Disappointing

(RTTNews) - Noble Energy, Inc. (NBL), an independent oil and natural gas exploration and production company, late Sunday said that the stability provisions ruling by the Supreme Court of the State of Israel is disappointing and represents another risk to Leviathan timing.

In its historic ruling, the court Sunday affirmed the Government of Israel's Natural Gas Regulatory Framework, with the exception of the stability provisions. As per the ruling, the deal to extract natural gas from massive offshore fields will be canceled within a year unless a central tenet of the agreement is significantly changed or canceled.

While recognizing the necessity of regulatory stability, the Court concluded that the Government should provide stability assurances and provisions through an alternate legal mechanism.

Prime Minister Benjamin Netanyahu signed the gas deal on December 17 last year, paving the way for a consortium of Noble Energy and the Delek Group to begin work on extracting gas from the massive Leviathan gas field off Israel's coast. The field is thought to contain some 22 trillion cubic feet of gas.

David Stover, Noble Energy's Chairman, President, and CEO, said, "The Court's ruling, while recognizing that timely natural gas development is a matter of strategic national interest for Israel, is disappointing and represents another risk to Leviathan timing. Development of a project of this magnitude, where large investments are to be made over multiple years, requires Israel to provide a stable investment climate. Noble Energy has consistently maintained that stability is a minimum condition for project development, and our position has not changed."

The company further said that it will vigorously defend its rights related to assets to protect shareholder value. It is now up to the Government of Israel to deliver a solution which at least meets the terms of the Framework, and to do so quickly.

The stability clause means that the government could not impose regulatory changes, such as breaking up suspected monopolies, on the consortium for a full 10 years.

Shortly after the ruling, Netanyahu said in a statement, "The High Court of Justice's decision threatens the development of Israel's gas reserves. Israel is regarded as a state with excessive judicial intervention, which makes it difficult to do business."