February 21, 2013 2:27 pm

Israel grants Golan exploration licence

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Israel has granted a US company a licence to explore for oil and gas in the occupied Golan Heights in a move likely to stir diplomatic controversy ahead of next month’s visit to the region by President Barack Obama.

The country’s energy ministry confirmed on Thursday that it had given the exploration licence to a local subsidiary of Genie Energy, a New York-listed company whose shareholders include Jacob Rothschild and Rupert Murdoch. Dick Cheney, the former US vice-president, is an adviser.

Israel seized the Golan Heights from Syria in the Six day war in 1967, but its occupation of the territory is not recognised under international law.

Although the territory has been largely peaceful since 1967, as Syria’s civil war has intensified Israeli officials have expressed concern that Damascus is deliberately seeking to draw Israel into the conflict. Late last year Israeli soldiers fired tank shells across the border after stray mortars landed in the Golan.

Some analysts have linked the timing of the licence award to the situation in Syria. Yaron Ezrahi, an Israeli political analyst, said: “This action is mostly political – it’s an attempt to deepen Israeli commitment to the occupied Golan Heights. The timing is directly related to the fact that the Syrian government is dealing with violence and chaos and is not free to deal with this problem.”

Genie competed for the drilling licence against an unnamed second company which Globes, the Israeli financial newspaper, identified as Ultra Equity Investments.

In accordance with Israel’s petroleum law, the exploration licence covers just under 400 square kilometres. “We applied for an oil and gas exploration licence which may entail drilling,” the US company said on Thursday. “We received notice of the licence yesterday.”

Genie already has an oil exploration and production licence in the Shfela region of central Israel, and a joint venture with Total to produce shale oil in Colorado.

A person close to the process, who asked not to be named, said that the company had submitted its application in August last year, and that the second company applied later.

Genie won the bid based on geological, professional and other criteria, this person said. Details of its bid are not publicly available.

Mr Obama is due to visit Israel, the occupied West Bank and Jordan in late March, at a time when Benjamin Netanyahu’s government is under growing diplomatic pressure over its expansion of settlements on occupied Palestinian land.

Recent natural gas finds off Israel’s coast in the Mediterranean have promised to transform the Jewish state into a significant energy power in its region.

The Tamar natural gasfield, which is due to begin producing in the second quarter of this year, is expected to contribute a percentage point to Israel’s projected 3.8 per cent growth in gross domestic product this year. Israel’s offshore gas reserve is one of the largest of its kind in the world and its potential output will greatly exceed Israel’s domestic needs, making the country an energy exporter.

The companies exploiting Tamar and the larger Leviathan field, Noble Energy and Delek Energy, have recently contacted potential customers in Turkey and Jordan who might be interested in taking gas via pipelines.

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