We are pleased to bring to your attention some recent developments in the oil and gas market in Israel:

  1. Gas Framework

On [18] May 2016, the Israeli Government approved a revised deal with the consortium of natural gas developers, following the ruling of the High Court of Justice issued on 27 March 2016 which held that Article 10 (the so-called "Stability Clause") of the Gas Framework Agreement (Government Resolution 476, pertaining to the framework for the expansion of natural gas production from Tamar and the speedy development of Leviathan, Karish, Tanin and additional gas fields) was unconstitutional. The Stability Clause prevented the State making any substantial changes to the understandings reached in the Gas Framework Agreement for 10 years.

According to the Government, the revised Gas Framework Agreement includes a softened Stability Clause, with the aim of fostering a regulatory environment which will encourage investment in natural resources, rather than solely seeking to preserve stability. In addition, the Government contends that the new Gas Framework Agreement does not limit the Government's authority to make regulatory changes, but rather prescribes the processes that should apply to future situations in which substantial changes may occur.

A full version of the Government decision (Hebrew) can be found here.

  1. Leviathan Development

The Petroleum Commissioner recently approved the development plan for the Leviathan fields. The approval constitutes another step in the process of developing thefield and connecting it to Israel's natural gas network. The press release from the Petroleum Commissioner (Hebrew) can be found here.