In October 2020, Chevron completed its acquisition of Noble Energy, making Chevron the operator of Israel’s Tamar (25% ownership) and Leviathan (39.66% ownership) offshore gas fields. Chevron’s first move was to shut off the flow of gas to Israel from the Tamar gas fields, forcing the Israel Electric company (IEC) to buy gas from the more expensive Leviathan field, in which Chevron owns an even larger share, effectively doubling their profits.
The move was done after Chevron (and previously Noble Energy) disagreed with a cheaper pricing agreement made between the IEC and the other partners in the Tamar field (Isramco, Dor Gas, Tamar Petroleum and other partners).
At the time, the Israel Competition Authority ruled that Isramco and Tamar Petroleum could make separate deals with the IEC from Noble (Chevron) and Delek, after the partners complained that Noble (Chevron) and Delek were blocking the the Tamar deal to halt competition, according to Globes.
According to Globes, the resolution that was reached allows the other partners to sell their share of the gas for less, potentially providing a savings of NIS 100 million to the Israel Electric Company, which may or may not translate into a savings for the average citizen.
According to the new agreement, the prices has been reduced, but negotiations on the new prices with the IEC will take place before the end of June 2021.
According to Globes, Chevron East Mediterranean manager Jeff Ewing said, “Chevron is committed to work in cooperation with all the parties at interest in Israel in order to achieve mutually productive results. The settlement obtained yields positive results for all the parties at interest including electricity consumers and brings this complex commercial dispute to a close.”
Minister of Energy Yuval Steinitz said the monopoly over Israel’s offshore gas fields has been dismantled and there is now competition between three gas fields and three energy companies. We will see in June when the prices are renegotiated if Steinitz is correct.
The IEC is not the only clients of the offshore gas fields, Israel also exports gas to Egypt and hopes to build a pipeline to Europe.