Although both Cyprus and Israel made significant progress throughout 2012 in planning their gas export strategies and attracting significant foreign investment in their upstream sectors, 2013 presents the two Mediterranean states with a new set of challenges. In 2012 Israel prepared detailed guidelines to govern its long-term gas strategy and establish a regulatory framework for exports and it now expects to receive its first major quantities of gas from the Tamar field, 30km offshore Ashdod, in April 2013, almost three months ahead of the original schedule. Passing these guidelines through the Knesset and transforming the pro-export recommendations of the Zemach Committee into law, in ways that will overcome the opposition of Israel’s well organized environmental lobbies and the “conservationists” of the Ministry of Environmental Protection, will likely prove a contentious process.

The Ministry of Environmental Protection has the power to decide on the environmental permits of any energy-related facilities throughout Israel’s territory, including its territorial waters up to 20km from the coastline, and it has repeatedly and openly criticized the recommendations of the Zemach Committee. Nevertheless the combined powers of the environmentalists and the conservationists are unlikely to change the direction set by the Zemach recommendations, which enjoy the full backing of the Ministry of Finance and the Prime Minister’s Office (PMO). (CONTINUED - 1103 WORDS)