"Home prices driving tech workers overseas"
Genie Oil and Gas unit IEI owns the shale oil exploration and mining rights in Elah Valley.
Lord Jacob Rothschild and Rupert Murdoch have invested in an Israeli venture to produce oil from bituminous-bearing rock (shale) in the Elah Valley in the Judean foothills. Last week, they acquired 11% in equal shares of Genie Energy Corporation unit Genie Oil and Gas Inc. for a total of $11 million.
Genie Energy, a subsidiary of IDT Corporation (NYSE: IDT), is the parent company (89%) of Israel Energy Initiatives Ltd. (IEI), which holds an exclusive shale oil exploration and production license covering 238 square miles in the Adulam district, which is between Beit Shemesh and Beit Guvrin. The company believes that its shale oil cracking technology can free the world from dependence on Arab oil and turn Israel into an energy powerhouse able to produce 300 billion barrels of non-conventional oil at a cost of up to $40 per barrel.
Genie Energy comprises IDT Energy,which resells electricity and natural gas to customers in New York, and Genie Oil and Gas Inc. Genie Oil and Gas Inc., which received the $11 million investment, consists of American Shale Oil Corporation, and the 89% stake in Israel Energy Initiatives.
Negotiations with Lord Jacob Rothschild and Murdoch began six months ago, and Lord Rothschild visited Israel during that time. Genie is involved in similar projects in Colorado and Mongolia. IEI president Effie Eitam, who served as minister of national infrastructures in the Sharon government, told "Globes" that IEI hopes to obtain a permit from the regional planning and building commission within days to carry out a pilot shale oil project on a six-dunam (1.5-acre) site in the Elah Valley.
Local residents strongly oppose IEI's venture. They fear possible environmental damage from the drilling. Residents claim that the drilling will harm the Adulam District's vistas and nature, as well as its vineyards, which have been called the Israeli Provence.
In response to the residents' claims, Eitam said that Jacob Rothschild was persuaded that the venture will cause no environmental harm, at least in the pilot stage. "Rothschild has a strong history of supporting the environment. He asked a great many questions on this point, and was persuaded that when the pilot is completed in two years, very few question marks will remain," he said.
Jacob Rothschild said, "Rupert Murdoch’s extraordinary achievements speak for themselves and we are very pleased he has agreed to be our partner. Genie Energy is making good technological progress to tap the world’s substantial oil shale deposits which could transform the future prospects of Israel, the Middle East and our allies around the world.”
"Covering and distributing news has been my life’s work," said Murdoch. "If Genie’s effort to develop shale oil is successful, as I believe it will be, then the news we’ll report in the coming decades will reflect a more prosperous, more democratic, and more secure world.”
In July 2008, IEI obtained its shale oil and exploration license from the Ministry of National Infrastructures. Under the license terms, the company has to launch a pilot project to produce 500 barrel of oil in the Elah Valley by mid-2011. The project will heat shale strata at a depth of 300 meters to a temperature of 300 degree Celsius for two years.
Published by Globes [online], Israel business news - www.globes-online.com - on November 21, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010
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