In 2023, Israel experienced a significant surge in its natural gas, minerals, and aggregates royalties, primarily fueled by an increase in exports to Egypt and Jordan. The Ministry of Energy and Infrastructure's National Resources Administration revealed in their annual financial disclosure a record-setting revenue of NIS 2.19 billion for the year, marking a substantial 28.8% growth from the NIS 1.7 billion reported in 2022.
This remarkable revenue boost was predominantly attributed to the natural gas sector, which alone contributed NIS 2.081 billion, up 23.8% from the previous year. The factors leading to this increase included enhanced production from Israel's gas fields, notably with the Karish reservoir beginning operations and an upswing in the volume of gas exports. Additionally, the fluctuating shekel-dollar exchange rate played a pivotal role. Of the total revenue from gas and condensates in 2023, NIS 1.19 billion, or 57.2%, came from exports, with the remainder generated from domestic production. Since the inception of gas production in Israel, the state has amassed over NIS 25 billion in revenues, with NIS 12.8 billion collected in royalties by the Ministry of Energy and Infrastructure and the balance from the levy on natural resource utilization profits and corporate taxes by the Israel Tax Authority.
"The revenue from natural gas exports royalties collected by Israel’s Ministry of Energy and Infrastructure hit a record 2.19B Shekels ($595M) in 2023, as exports to Jordan and Egypt increased by 25%. The total income from such royalties has crossed the 25B Shekel ($6.7B) mark." https://t.co/Z6nVE5GAAO
— (((Bennett Ruda))) (@daledamos) February 27, 2024
The year-on-year exported gas volumes to Egypt and Jordan witnessed a 25% escalation, serving both local electricity generation and, in Egypt's case, liquefaction for further export to Europe as LNG. Overall, natural gas production in 2023 saw a 13.9% increase over 2022, despite a drop in supply from the Tamar and Leviathan reservoirs to the Israeli market due to the Karish reservoir's entry.
Minister of Energy and Infrastructure, Eli Cohen, highlighted the sector's economic boon, emphasizing the strategic significance of the natural gas industry in bolstering Israel's regional stability and its potential for further growth in exports to Europe. Cohen noted the establishment of a new exports committee to explore expansion opportunities, including the feasibility of an Israeli gas liquefaction facility.
Yeah sure, a "massive gas field" (Marine 1 and 2) worth about $32 Billion discovered in year 2000 with Israel giving preliminary approval for the development of the gas field in 2023 as a revenue stream for Gaza".
— IWIK (@Heteromecheng) February 26, 2024
Israel has its own gas fields, as can be clearly seen. pic.twitter.com/l5LdbBG2jV
Conversely, the Israel Union for Environmental Defense (Adam Teva V’Din) voiced concerns over the revenue growth, pointing out the simultaneous occurrence of gas shortages within the Israeli economy. These shortages led to reliance on costlier and more polluting fuels, particularly noted during a major supply disruption from the Karish field in early June 2023. The organization stressed the importance of prioritizing domestic gas needs and energy security, especially during transition periods to low carbon energy sources. It argued against allowing economic incentives to drive continuous gas exports at the expense of Israel's internal needs during supply breakdowns or shortages, underscoring the need for a balanced approach to natural resource management that safeguards both economic interests and environmental well-being.
