Regulator Opposes Noble, Delek Control of Israeli Field

Israel's antitrust regulator has recommended breaking up what it says is excessive control of key gas reserves by Noble Energy (NBL) and conglomerate Delek Group, who together hold 85 percent of the country's giant Leviathan field.

Competition authorities had initially rubber stamped the acquisition of Leviathan, provided Delek and Noble sold stakes in two smaller gas sites. The turnaround rattled investors and sent Israel's oil and gas stocks tumbling as much as 20 percent on Tuesday.

Antitrust commissioner David Gilo said late on Monday that he had summoned the companies to tell them that he was reconsidering the earlier arrangement.

"The entry of Delek and Noble into Leviathan created a situation in which these groups control all of the gas reserves on the State of Israel's coast," the regulator said in a statement.

With an estimated 22 trillion cubic feet (tcf) of reserves, or 622 billion cubic meters, Leviathan was among the largest offshore gas finds of the past decade. Production of Leviathan is expected to begin by 2018 and initial investment could reach an estimated $6.5 billion.

Noble owns 39.66 percent of Leviathan. Delek Drilling and Avner Oil Exploration -- both units of Delek Group -- hold 22.67 percent each and Ratio Oil Exploration owns 15 percent.

Delek and Noble also hold major stakes in the Tamar field, which is near Leviathan and started production nearly two years ago. Tamar has estimated reserves of 10 tcf, or 280 bcm.

The authority plans a hearing with the companies before making a final decision.

Reporting by Steven Scheer and Dan Williams