Chairman of the Manufacturers Association of Israel Shraga Brosh has called on Minister of National Infrastructures, Energy and Water Resources Yuval Steinitz (Likud) to compel licensees who receive new gas and oil exploration permits to make procurements from Israeli industry.
In August, the Israel Petroleum Council authorized the new zoning of Israel's oil and natural gas exploration areas, and announced that 24 'blocks' (permit areas) for oil and natural gas exploration in the Mediterranean Sea will be marketed later this year in a competitive international process.
Brosh believes that the intense exploration of oil and gas conducted by foreign companies in Israel's economic waters could also provide Israeli industry with an excellent opportunity. "In order to fully utilize the added value to the Israeli economy from oil and gas discoveries, Israeli industry must be added into the entrepreneurs' supplier pool, by defining binding terms in which applicants bidding for licenses will be required to prefer Israeli products. Such a preference will generate significant additional tax revenues for the state and thousands of new jobs," Brosh wrote to Steinitz.
The Israel Petroleum Council decision last summer enables the renewal of oil and natural gas exploration in Israel's economic waters. This take places after four years in which no exploration licenses have been issued. Brosh wrote, "in contrast to the frequent regulatory changes made in the past few years, we are now given the opportunity to set the rules of the game in advance, in a way that will enable oil and gas developers to prepare accordingly - before they bid in tenders." The Manufacturers Association expects the Ministry of National Infrastructures, Energy and Water Resources to insist that bidders present a procurement plan from local industry, a plan that will serve as one of the criteria for the provision of permits.
"The Petroleum Council's decision regarding the renewal of granting permits had been based on a research that determined that Israel's waters contain minerals totaling 6.6 billion barrels of oil and 2,137 BCM of natural gas. Therefore, exploration in Israel economic waters is expected to be attractive for many companies, even if preference for Israeli suppliers is set as a condition," Brosh said.
Published by Globes [online], Israel business news - www.globes-online.com - on October 31, 2016
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