Policy & Regulation: Overview


The legal framework for the exploration and production of hydrocarbon resources in Israel rests inter alia on the 1952 Petroleum Law, the 1953 Petroleum Regulations, the 2011 Petroleum Profits Taxation Law and the 2016 Offshore Regulations. The legal situation gives the Petroleum Commissioner a large degree of discretion in determining and implementing policy, subject to the existing laws and regulations, as well as government policy reflected in government decisions. The Petroleum Commissioner is supported by the professional staff at the Ministry of Energy and advised by the Petroleum Council.

The basis for government policy on the exploration, production, domestic use and export of natural gas, following the discovery of the Tamar and Leviathan fields in 2009-2010, was set by the Tzemach Committee in 2012-2013, and adopted by Government Decision No. 442. The committee recommended that every field discovered should be connected to the domestic market, and that significant amounts of gas should be reserved for domestic use, in order to ensure the country's energy security in light of its increasing reliance on gas. In 2018, the Adiri I Committee, tasked with a periodic review of the policy after five years, concluded that in order to stimulate exploration, the two obligations listed above should be reduced for fields smaller than 200 BCM. In 2021, in light of an expected decrease in domestic demand due to the entry of renewable energy, the amount reserved for domestic use was reduced even further.

Current Israeli policy, as reflected by the Adiri II report, aims at incentivizing further exploration for natural gas in order to locate new resources in the order of 500 to 1000 BCM over the next decade. Special impetus is given to these efforts by the enhanced role for natural gas as an enabler of renewable energy, the new emphasis in EU policy on diversification of its gas supply, and the exciting possibilities resulting from the adoption of new technology such as hydrogen and CCUS.