Noble to Sell 3% of Tamar Shares to Harel Group

Noble Energy is in negotiations with Harel Insurance Investments and Financial Services – the third biggest insurance group in Israel – to sell a 3% stake in Tamar gas field and an option for the sale of a further 1%. The proposal has alarmed many as it could tie the hands of government to intervene if gas prices are seen as too high.

Harel will pay up to $400mn on a valuation of $10.5 bn for the gas field, according to The Marker, a business daily, which was the first to report of the possible transaction.

Harel later approved the negotiations in a filing to the Tel Aviv Stock Exchange (TASE). According to analysts, the price is a 10% premium to the current share price of Isramco, a 29% shareholder in Tamar. Isramco's energy business are mainly concentrated in Tamar.

According to the regulatory natural gas framework, Noble has to sell off 11% of Tamar within six years. The sale to Harel is its first stake to be sold. Delek Group has to sell off all its 31% shareholding in Tamar within six years. Harel is expected to pay for purchase with money received from life insurance policies and pensions funds it is handling.

Opponents of the framework, who are still fighting to reduce the natural gas price, warn against the deal since it would link current and future savings of Israeli citizens to the high price of natural gas in the Israeli market. If that is to happen it will thwart future governments from exercising price control since it will find itself harm the public savings as well as the opposition from the powerful finance and insurance lobby.

The deal has to be approved by Israel's energy ministry.

Ya'acov Zalel