JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu will decide in the coming weeks on the scale of royalties the Jewish state should claim for its huge offshore gas discoveries in the Mediterranean, he said on Sunday.
Netanyahu told his cabinet he would this week meet with the Finance Ministry-appointed panel that made its proposal for the royalties known as the Sheshinski commission as well as concerned ministers and investors, before making his own proposal that would be put to a cabinet vote.
He added that money accrued from the royalties should go to a national fund whose main aim would be to enhance Israel's spending on its defence and education needs.
"I will decide on my recommendation to the cabinet in the near term and in one of the upcoming cabinet meetings I will present this recommendation for a decision," Netanyahu said.
Israel's production of natural gas is set to soar in coming years following discovery of two large fields off its Mediterranen shore, which could make Israel an energy exporter.
In its final report published last week the commission proposed keeping the basic royalties rate on oil and gas revenues at 12.5 percent but adding escalators dependent on profitability which could go as high as 20 to 50 percent.
It was less than its recommendation of as much as 60 percent which it had made in an interim report it issued in November. Finance Minister Yuval Steinitz said last week he would soon make his own recommendations to Netanyahu.
The government now takes about 30 percent of revenue from the country's single existing gas field in a combination of taxes and royalties.
Two recently discovered gas fields are set to boost the sector significantly and together could generate up to $4 billion (2.6 billion British pounds) in annual revenue for Israel, officials say.
The Tamar field, discovered in 2009 by a group led by Noble Energy of the United States and Israel's Delek Energy has estimated reserves of 8.4 trillion cubic feet. Last month the partners confirmed that another new discovery, the nearby Leviathan field, was twice as big.
Energy companies say they have spent years exploring in Israel and its territorial waters and contend that any raising of taxes would constitute a breach of contract and scare off future investors. Also opposed to the plan is Infrastructure Minister Uzi Landau, who has warned of delays in gas production.
Any proposed change needs the approval of the cabinet as well as parliament.
(Writing by Ori Lewis and Steven Scheer; Editing by Greg Mahlich)
