Givot request to drill 3 new Meged wells rejected

The regional planning and building board rejected Givot's requests to drill the Meged 6, 7, and 8 exploratory wells.

Givot Olam Oil Exploration LP (TASE:GIVO.L) notified the TASE on Friday that the Ministry of Interior's regional planning and building commission has rejected the company's request to drill the Meged 6, 7, and 8 exploratory wells. Givot stated, that it obtained an unsigned and undated copy of the minutes of a meeting by the commission, dated November 14, 2011, which rejected the request. "To the best of the general partner's understanding (which was also orally conveyed to its representative at the Ministry of Interior discussion), the request was rejected because of a retroactive change in the planning procedures for oil wells," stated the company.

Givot applied for the permits in July 2011, and had expected to begin drilling the new wells last week, but the rejection of its application will delay matters by at least three months. The company does not expect more delays.

Givot applied for the drilling permit under the Planning and Building Law, but a petition filed with the High Court of Justice by another oil exploration company resulted in an amendment to the planning procedures which require all oil exploration companies to submit drilling permits through the Oil Law (5712-1952). Givot said that the Ministry of Interior's legal adviser halted the process because of the petition to the High Court of Justice.

In its response to the petition, the state promised that the planning process would be changed, and henceforth be made through the Oil Law, rather than the Planning and Building Law. Givot said that halting the process created an unreasonable situation that froze the current process for approving oil wells under an existing exemption, at time when approval of oil wells under a different procedure does not yet exist.

Givot added that the Ministry of Energy and Water, which is responsible for the Oil Law, has prepared new procedures for exempting oil wells from the Planning and Building Law, and that they are in the final approval stages for publication.

Givot's share price fell 2% in morning trading today to NIS 0.05, giving a market cap of NIS 539 million.

Published by Globes [online], Israel business news - www.globes-online.com - on January 8, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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