Israel awards first Golan oil drilling license

The license was awarded to Genie Energy, headed by former minister Effie Eitam. Shareholders include Lord Jacob Rothschild, and Rupert Murdoch.

A month before US President Barack Obama is due to visit Israel, the Israeli government has awarded the first license to drill for oil on the Golan Heights. The license covers half the area of the Golan from the latitude of Katzrin in the north to Tzemach in the south.

In the past, the US government reacted angrily when Israel approved construction in eastern Jerusalem ahead of a visit by Vice President Joe Biden.

Sources inform ''Globes'' that, a few days ago, the Ministry of Energy and Water Resources' Petroleum Council recommended awarding the license to Genie Energy Ltd. (NYSE: GNE), headed by former minister Effie Eitam. Shareholders include chairman Howard Jonas, Lord Jacob Rothschild, and Rupert Murdoch. Former US Vice President Dick Cheney is an advisor.

Awarding a drilling license on the Golan could cause an international fracas, given the Golan's status as occupied Syrian territory under international law. There was no known political intervention in the licensing process, the proximity of the event to Obama's upcoming visit is coincidental.

The process of granting the license began following geological tests, which indicated a large potential oil discovery in the southern Golan Heights. On the basis of the findings, last summer, Minister of Energy and Water Resources Uzi Landau declared the Golan as open for oil and gas exploration and production activity. Following the announcement, two license applications were filed with the Petroleum Commissioner for the southern Golan, an area of thousands of hectares.

Genie Energy bid against Ultra Equity Investments Ltd. (TASE: ULTR), who is being advised by former Petroleum Commissioner Dr. Yaakov Mimran, who held the post until 2011. Sources inform ''Globes'' that the Petroleum Council preferred Genie Energy for professional reasons.

Genie Energy's win in the license is highly symbolic for Eitam, who resides at Moshav Nob on the Golan, and fought against the Syrian Army there during the 1973 Yom Kippur War, winning a medal for courage.

Genie Energy is the parent company of Israel Energy Initiatives Ltd. (IEI), which is moving forward on a venture to develop shale oil deposits in the coastal plain.

Published by Globes [online], Israel business news - www.globes-online.com - on February 20, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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