Israel, China sign energy cooperation agreement

Yuval Steinitz  picture: Eyal Yitzhar

Energy Minister Yuval Steinitz has invited Chinese energy companies to bid for Israeli oil and gas exploration licenses.

Israel and China have signed a document of understandings expanding their cooperation in energy technology research and development, including the establishment of funds for renewable energy. In his many hours of meetings in recent days with energy companies in Beijing, Minister of National Infrastructure, Energy, and Water Resources Yuval Steinitz called on them to invest in the energy sector in Israel.

Steinitz was invited to China to represent the Israeli government in a Chinese-Israeli conference on entrepreneurship and investments. At the outset of the conference organized by the Ministry of Economy and Industry in cooperation with the Israeli embassy in Beijing, Steinitz said, "When big China and little Israel combine forces, we become a little bigger and much stronger and significant in the global economy."

Fosun Group chairman Guo Guangchang, who took part in the conference in Beijing and conversed on the podium with Ministry of Economy and Industry director general Amit Lang, said, "We are optimistic about the Chinese economy in the long term, and about business cooperation and opportunities involving China and Israel."

Steinitz's meetings with Chinese energy companies included Sinopec Group (China Petroleum & Chemical Corporation), China Gezhouba Group Corporation (CGGC), and China Machinery Engineering Corporation (CMEC). Steinitz notified the companies that Israel planned to reopen its economic waters for oil and gas exploration, and invited them to participate in the exploration. He said that Israel was interested in having Chinese companies participate in tenders for oil and gas exploration this coming summer.

In 2002, the Ministry of National Infrastructure, Energy, and Water Resources stopped granting new exploration licenses in order to change its oil legislation and set policy for the sector. Granting of licenses resumed after a few years, and was then halted again; the Ministry of National Infrastructure, Energy, and Water Resources has granted no licenses since. In his recent report on the development of the natural gas sector, the State Comptroller criticized the Ministry of National Infrastructure, Energy, and Water Resources for these actions, and asserted that it caused a gas monopoly to emerge in Israel, among other things.

Steinitz also met with Guangchang in Beijing, whom he said had expressed interest in energy investments in Israel. Guangchang is scheduled to visit Israel in two days. Fosum is planning to acquire The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), but approval from the Ministry of Finance is being delayed because Guangchang was recently arrested on suspicion of bribery.

In the meetings, Steinitz expressed a desire for cooperation in renewable energy, noting that Israel plans to increase its use of solar and wind energy in the coming years. He asked that Chinese companies use the know-how and experience they have accumulated in solar and wind energy, as well as in introducing the use of natural gas in public transportation, to help Israel, among other things.

As revealed by "Globes," the ministerial committee for examining fuel taxation policy (Environmental Taxation III Committee) is expected to submit its recommendations for encouraging the use of gas in transportation. While the committee will probably recommend reducing excise taxes on natural gas for transportation to one third or one half of the excise tax on diesel fuel), Steinitz is demanding a 10-year full tax exemption.

Published by Globes [online], Israel business news - - on January 5, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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Yuval Steinitz  picture: Eyal Yitzhar
Yuval Steinitz picture: Eyal Yitzhar
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