The framework agreement the government signed for the exploration of offshore Mediterranean gas by a consortium was dismissed Sunday by the High Court of Justice. The judges ruled the 10-year “stability clause” was unconstitutional and contrary to the basic tenets of administrative law, and gave the government a year to renegotiate it.
The ruling is a major setback to the economy and a bad blow to prime minister Binyamin Netanyahu, who staked his entire reputation in getting the gas fields on line after endless delays. Under the “stability clause,” the state pledged to abstain from substantive regulatory changes for the gas industry, with regard to taxation, exports and ownership of the fields, for a 10-year period.
The government last year reached a deal with Texas-based Noble Energy and Israel’s Delek Group that would leave them in control of the country’s largest gas field, Leviathan, while forcing them to sell smaller, yet sizable, assets. Opponents said the deal would create an energy monopoly and had petitioned the court, hoping it would be struck down.