Israel to Establish Fund to Manage Natural Gas Revenues
The Israeli government on Sunday opened talks to establish a special fund to manage what may add up to some 600 billion shekels (160 billion U.S. dollars) in natural gas revenues in coming decades, from several new offshore finds.
Last Sunday, an American-Israeli drilling consortium announced the discovery of a new Mediterranean natural gas field about 120 kilometers northwest of the Haifa coast, containing 35 billion cubic meters of gas.
The site is adjacent to the Israeli-owned Tamar and Leviathan fields, discovered in 2009 and 2010, respectively. Tamar contains an estimated 240 billion cubic meters of natural gas, and Leviathan 450 billion cubic meters.
In last May, the Knesset parliament passed the Taxation of Oil and Gas Revenues Law, which boosted the government's share of the gas revenues. Ministry of Finance officials told Xinhua on Sunday that by the year 2040, the natural gas revenues could add up to over half a billion shekels (133 million dollars).
"The interest from this fund would be enormous, and it will be used for projects that would benefit the people of Israel," said an official, who declined to be named.
He noted that it was Finance Minister Yuval Steinitz's idea to establish a public committee that lobbied for the law.
However, "In order not to spend the money right away and to make the most effective use of it, it was decided to open a state- owned fund with criteria for investments by needs," the official said.
Referring to the fund, Prime Minister Benjamin Netanyahu on Sunday said at the start of the weekly cabinet meeting that "Today, we will begin the discussion that will lead to the creation of a sovereign capital fund, the fruits of which will be divided among Israel's vital needs, especially education and security."
Netanyahu said that although it is "true (that) the fruits of the fund will arrive only in a few years," they eventually will arrive. "There will be a lot of money for the State of Israel from royalties from natural gas under the sea," the prime minister noted.
According to the team's recommendations, approximately half of the state revenues from oil and gas resources will be deposited in the fund, which will then invest the monies abroad.
While the fund "would constitute as a 'security cushion' for dealing with unexpected expenditures such as wars, natural disasters and economic crisis," a Prime Minister's Office (PMO) statement said, the fund's chief profits would largely be invested in security and education.
In addition to the funding discussions, Netanyahu also appointed the PMO's Director General Harel Locker to chair a committee to advance the natural gas sector in Israel.
"The committee will also deal with geo-political aspects of the industry, including exports to east Asia and promoting economic ties with various countries around the world," another PMO statement said.
Finance Ministry sources said that India has already showed interest in purchasing the natural gas in the future.