Raising royalties on licenses that have already been given out for oil and gas exploration is a "terrible thing that can cause damage that it will be impossible to repair," said Delek Group Ltd. (TASE:DLEKG) controlling shareholder Yitzhak Tshuva today. He was speaking at a ceremony with Minister of National Infrastructures Uzi Landau at the Water Authority offices in Tel Aviv, to celebrate publication of the 3D seismic survey of the Leviathan licenses, which showed a high likelihood that Israel's known gas reserves have quadrupled.

The ceremony took place against the backdrop of a fierce argument over the government's desire to raise the royalties collected on gas revenue.

Tshuva added, "It is simply not right to even think in this direction. Even thinking about it does damage."

Landau supports Tshuva's position, "I oppose changing the rules of the game about future discoveries. Leviathan was a discovery made after a lot of investment. A basic rule is that contracts must be honored."

Landau said that if the estimates about the quantity of gas reserves are realized, then the State of Israel will become an exporter to Southern Europe. He said, "We are checking with the Israel Electric Corporation to what extent the new Ashkelon power station can be dual purpose, that is to say operated by natural gas backed up by coal. The discovery of gas makes this option much more attractive."

Tshuva said, "We will carry on drilling and we will make additional discoveries that will make us a leading energy player in the world. Many countries will turn to us to receive information and check out the possibility of us supplying them with energy."

Published by Globes [online], Israel business news - www.globes-online.com - on June 7, 2010

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