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‘Israel will not relinquish share of gas reservoir’

Energy Minister Director-General Udi Adiri warned Delek’s C.E.O. and the representatives of Nobel and Shell that Israel will not wave its rights in the Yishai-Aphrodite reservoir.

“The Government of Israel will continue and act in every possible way to secure its rights in the gas reservoir Yishai-Aphrodite,” Adiri said in a statement, adding that “the development and exploitation of the reservoir by the licensees of both states must not commence prior to reaching an agreement between the governments of Israel and Cyprus.”

The announcement followed an appeal issued by the Partnership to the Ministry of Energy, Ministry of Finance, and Ministry of Justice, following a report that the Government of Cyprus, together with the companies Delek, Shell, and Nobel, signed a development agreement for the reservoir Aphrodite, and the Yishai reservoir, which is common to Cyprus and Israel. Based on economic work prepared, Israel’s share from taxes and royalties ranges between 3-5 billion NIS.

In the urgent appeal by the partnership in the Yishai reservoir to the government, it was argued that “once more we witness that the Cyprus government and the Aphrodite partnership […push] further the reservoir development one step forward, with total blatant and degrading disregard of Israel’s rights, and the Yishai possession in the reservoir.”

“Allegedly, already for several years, negotiations are held between Israel and Cyprus on Israel’s share in the reservoir. In practice, Cyprus and the Aphrodite partnership are unilaterally promoting its development without coordination with Israel. All of this is not a matter of chance but rather an intended strategy to put Israel to sleep until it faces a finalized fact that will leave it with a limited maneuvering space to protect its rights in the reservoir.

“The latest development in Cyprus is one more proof that time has arrived to acknowledge the fact that Cyprus and the Aphrodite partnership are not waiting for Israel, but rather gallops forward in the direction of commercialization of the reservoir, that in a pessimistic scenario will be one-sided, totally dispossessing Israel of its rights, and in the optimistic scenario, offering Israel a humiliating handful of crumbs.

“It is embarrassing to see how the government of Israel allows Delek and Nobel to humiliate it in such a way after it nurtured them and helped them grow, only to observe them spitting with contempt into the well which watered them, to control of the local and regional gas market.”

In a response, Adiri forwarded to the Yishai reservoir partnership the letter issued recently by the Ministry of Energy to Delek Nobel, and Shell, warning them of their continued unilateral development of the Aphrodite reservoir without consideration of Israel’s rights in the common reservoir.

In the letter, sent to Chris Breez of Shell, Kieth Elliot of Nobel Energy, and Yossi Abu of Delek Drilling, Adiri warned: “The Aphrodite-Yishai field is a cross-boundary natural gas reservoir, and as such, Israel and Cyprus have held several years of negotiations for the purpose of reaching a bilateral agreement regarding the exploitation of the the Aphrodite-Yishai field. One of the options raised for consideration was the possibility of initiating direct negotiation between the licencees of both countries, subject to the approval by two states.”

“However, up to this point, the two states have not concluded the necessary agreement that would facilitate the fair exploitation and development of the field, for the benefit of all involved parties.

“I wish to advise you that the State of Israel has not relinquished its share of the Aphrodite-Yishai natural gas reservoir, and it has no intention of doing so. I also wish to advise you of the position of the State of Israel, that the development and exploitation of the Aphrodite-Yishai field by the licensees of both states must not commenceprior to reaching an agreement between the governments of Israel and Cyprus.”

In response, the Yishai partnership stated: “We congratulate the Government of Israel on its unequivocal announcement stating that it will insist on exhausting the rights of the State of Israel in the common reservoir and for its warning the partnership in the reservoir in Cyprus not to perform any unilateral actions related to the development before the conclusion of negotiations between the governments of Israel and Cyprus.”

The Yishai partnership also stated that “certainly following this development and the sending of a first public official notice to Delek and its partners on the Cyprus side, we urge the Ministry of Energy and the Government of Israel, to progress as fast as possible towards an official agreement that will fortify Israel’s position and prevent once and for all, the possibility of billions loss to the State Fund.”

Aphrodite gas field is an offshore gas field off the southern coast of Cyprus located at the exploratory drilling block 12 in the country’s maritime Exclusive Economic Zone. Located 34 kilometres (21 mi) west of Israel’s Leviathan gas field, block 12 is believed to hold 3.6 to 6 trillion cubic feet (100×109 to 170×109 m3) of natural gas.