Houston's Nobel Energy Co., which is exploring the fields with three Israeli firms, estimates that the fields could hold as much as 30 trillion cubic feet of natural gas. That's double the size of Britain's giant gas fields in the North Sea and could be worth $300 billion.
The fields -- Dalit, Tamar and Leviathan -- up to 90 miles out in the Mediterranean off Israel's northern coast will transform the Jewish state's economy and make it a gas exporter.
Lebanon says that the Leviathan field extends northward into its continental shelf and that it has as much claim on the gas as Israel.
Given the hostility between Israel and Lebanon, particularly the Iranian-backed Hezbollah guerrillas, that dispute could spiral into a casus belli. Hezbollah declared it would never allow Israel to "loot" Lebanon's natural resources.
Israel's combative infrastructure minister, Uzi Landau, warned that the Jewish state would use force if necessary to defend its right to develop these underwater fields.
But right now, Nobel Energy and its Israeli partners, led by the Delek Group, which is run by the Israeli billionaire Isaac Tshuva, appear to be more concerned that the Israeli government wants to amend a 1952 law that gives the state 12.5 percent of the royalties from any oil or gas production.
Finance Minister Yuval Steinitz told the Financial Times he wants to revise the "anachronistic" law to boost the state's cut of future revenues. He declined to say what figure he had in mind but said much would depend on how extensive the reserves turn out to be.
In the meantime, he has set up a committee to review the 1952 legislation on royalties and tax from oil and gas, passed when Israel had little expectation of becoming an energy producer. The committee is to make its report in mid-August.
"The chance that the committee will decide to recommend to reduce the government take seems to be very small," Steinitz observed.
What angers Nobel Energy and its partners most is that Steinitz wants to make the increase retroactive to cover Israeli fields in which they have already invested.
The FT reported June 30 that Nobel Energy has pulled strings in Washington to lobby against the Steinitz plan and the U.S. Embassy in Tel Aviv has written to the finance minister on the matter.
Lawson Freeman, vice president of Nobel's operations in the eastern Mediterranean, told the Financial Times: "We feel that the energy industry in Israel is in its infancy.
"And it's probably at the most critical point to have stability of fiscal terms to encourage international investment."
The Israeli liberal daily Haaretz reported that the committee "is tending toward rejecting the argument by the energy barons that Israel can't change tax rates retroactively. A sovereign nation has to be free in setting tax policy."
But the newspaper noted that some members of the committee believe that retroactively changing the tax rate on energy companies after they risked heavy investment during the exploration stage "would damage Israel's good name and deter foreign investors."
Haaretz concluded the committee "is likely to try to forge a compromise that would let the state raise tax on the exploitation of natural resources -- but in a manner that factors in preliminary investment.
"In other words, a company that invested large sums before the tax hike would be immune, at least to a degree," the Haaretz report said.
Noble Energy owns 36 percent of the Tamar field, which could contain 8.5 trillion cubic feet of gas, and 40 percent of Leviathan.
That's much bigger and hasn't been fully explored. But Noble estimates it could have reserves of as much as 16 trillion cubic feet.
The Delek Group has a 31.25 percent stake in Tamar and 40 percent in Leviathan.
Tamar, 40 miles off the Israeli port of Haifa, is expected to cover Israel's domestic gas requirements for 35 years. Leviathan's reserves, if they meet expectations, will make Israel a natural gas exporter for the first time.