Sources inform ''Globes'' that the Ministry of National Infrastructures will, for the first time, conduct a competition among applicants for oil and gas exploration licenses. The competitive process will be held when several applications are filed by companies that are deemed "serious". The ministry is currently debating the structure of the process.
One proposal is to conduct a kind of tender on the amount of payment for a license, or on the royalties that the licensee will pay in the event of commercial production. However, the Ministry of National Infrastructures prefers to base the process on professional criteria and bids.
The new procedure may be applied for the upcoming filing of exploration license applications in July. The idea for the new procedure arose in response to the rising interest in gas exploration in Israel, and the desire to encourage large international oil and oil and gas exploration companies to begin activity in Israel.
The current procedure dates back to the Petroleum Law (5712-1952). It states that if more than one application is submitted for an exploration license, the Oil and Gas Supervisor will pick the applicant recommended by the Oil Council based on a scoring system established by geologists.
A bitter bidding battle is anticipated for the offshore Benjamin exploration license, after two groups - ACC Group, headed by Chaim Lebovits; and a consortium of Ofer Nimrodi's Israel Land Energy Ltd., Nochi Dankner and Yitzhak Sultan-controlled Modiin Energy LP (TASE:MDIN.L), and Israel Petroleum Company (IPC) investor Howard Cooper of the US, (IPC is controlled by Canada's Bontan Inc. (Bulletin Board: BNTNF)) - announced their intention to bid for it.
Published by Globes [online], Israel business news - www.globes-online.com - on May 5, 2010
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