The Antitrust Authority today announced that it considering declaring Delek Group Ltd. (TASE: DLEKG) units a monopoly in natural gas exploration. The announcement follows a review of several months into the operations of Delek Group holding company Delek Investments and Properties Ltd. and its units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) and their partner Noble Energy Inc. (NYSE: NBL) unit Noble Energy Mediterranean Inc.
Avner and Delek Drilling are partners in Ashkelon and Noa reserves, which constitute Yam Tethys, the sole Israeli supplier of natural gas. They are also partners in the Tamar, Dalit, Leviathan, and other licenses.
The Antitrust Authority notified the Tamar and Dalit partners - Noble Energy, Delek Drilling, Avner, Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Alon Natural Gas Exploration Ltd. (TASE: ALGS) that it was considering declaring them a natural gas supply monopoly when Tamar comes on line in the second half of 2013.
Beginning in 2013, Tamar and Dalit are due to supply more than half of Israel's natural gas needs, and the partners are currently in talks on long-term gas supply contracts from the reservoirs.
The Antitrust Authority also announced that it was considering declaring Leviathan partners Noble Energy, Delek Drilling, Avner, and Ratio Oil Exploration (1992) LP (TASE:RATI.L) as a cartel because of their Ratio Yam provisional permit, which includes the Leviathan gas reservoir. Ratio was the sole owner of the Ratio Yam provisional permit until 2007, when Noble Energy, Delek Drilling, and Avner bought into it even as they owned other oil and gas assets. These holdings allegedly constitute a cartel without approval from the Antitrust Authority.
The Antitrust Authority has summoned the companies to a hearing to hear their arguments and responses.
Several weeks ago, the Antitrust Authority notified several oil and gas exploration companies, including Noble Energy, Delek Group, Modiin Energy LP (TASE:MDIN.L), and Israel Land Development Company Energy Ltd. (TASE: IE) that several pending arrangements between them were liable to be considered as restraint of trade, which would require approval by the Antitrust Authority.
Delek Group's share price fell 7.6% by mid-afternoon to NIS 551.80, Avner's share price fell 5.2% to NIS 1.70, Delek Drilling's share price fell 5.4% to NIS 9.60, Isramco's share price fell 5% to NIS 0.358, and Ratio's share price fell 6.7% to NIS 0.318.
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