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How to obtain a Petroleum Exploration License in Israel?

Michael Decker
Michael Decker

Obtaining a petroleum exploration license in Israel is a complicated legal procedure. However, it is necessary for all entrepreneurs who wish to search for crude oil on Israeli soil. The normalization of relations with Persian Gulf countries, along with other recent events, have aroused great interest among international companies in opportunities for collaboration in searching for oil in Israel. In this article, we will explain the legal procedure for obtaining an exploration license in Israel.

Our law offices specialize in commercial law and corporate law. The offices are well experienced in accompanying Israeli and international companies. Our attorney can assisting you with obtaining licenses in the energy field and representing them in Israeli courts and in procedures held before the Israeli government offices.

Did You Know that Israel has Petroleum Reservoirs?

Petroleum exploration license in IsraelNot everyone is aware that Israel has a number of onshore and offshore oil fields. The accurate amount of petroleum reservoirs in Israel remains unknown. The state of Israel is highly interested in locating petroleum in its territories, and to develop that industry, along with the already developed natural gas industry

Who is Allowed to Search for Petroleum in Israel?

According to the Israeli law, exploration of natural resources requires a license. Accordingly, entrepreneurs that wish to search for oil in Israel need to obtain a license in order to do so. The Israeli Ministry of Energy has published guidelines and criteria for applicants wishing to conduct petroleum exploration. The application is submitted to the Ministry and examined by representatives and experts on its behalf.

It is important to emphasize that according to the Ministry’s guidelines, international companies cannot obtain a license without including Israeli workers in the searching team. The goal behind this requirement is probably to incentivize Israeli and international companies to collaborate.

New Opportunities for UAE and Persian Gulf Entrepreneurs

The 2020 peace agreement between Israel, the UAE and Bahrain, opened many opportunities for entrepreneurs from those and other Persian Gulf countries, where there are many companies with a rich experience in locating oil reservoirs. On the Israeli side, there are some impressive achievements of local and international firms in exploration and production of natural gas. These achievements currently attract interest in business opportunities in the energy field.

Preconditions for Obtaining Petroleum Exploration License in Israel

The aforementioned guidelines of the Ministry of Energy detail the criteria for obtaining the license. The criteria includes the establishment of a professional and experienced team. This team should have a well experienced project manager, with at least 10 years of experience in oil exploration projects, with total costs of at least 10 Million ILS (approx. 2.9 Million USD). In addition, the team must include a geologist, a geophysicist and an engineer, each with 5 years of relevant experience. At least one of the team members must be an Israeli resident.

Another requirement is to detail and prove the ability to handle the project’s costs, and at least 50% of the oil drilling costs. The applicant must also submit a bank guarantee or an insurance guarantee of 100,000 ILS (approx. 34,000 USD). 

The Examination Process

After submitting the application, it will undergo an in-depth examination at the Ministry of Energy. Among the parameters which will be examined are the relevant professional experience of the applicant, the overall experience of the professional team, adherence to similar working plans in the past and present, and financial stability which is above the minimum required. 

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The attorneys from our law offices are available for questions and assistance regarding petroleum exploration licenses in Israel. We specialize in corporate and commercial law, and provide comprehensive legal assistance for entrepreneurs from Israel and around the world and fields such as energy, innovation, start-ups, etc.

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