The cash-strapped Palestinian Authority (PA) is looking for oil in Judea and Samaria, in areas currently occupied by Israel.
Mohammad Mustafa, the deputy prime minister for Economic Affairs, announced on Tuesday that the PA is requesting proposals from interested firms to explore and develop oil in the region, according to the PA-based WAFA news agency. The license area extends over 432 square kilometres, from north of Qalqilya to the west of Ramallah.
The tender documents were prepared under the supervision of a special Ministerial Committee headed by Mustafa and with the aid of international expert firms such as Exploration Reservoir Consultants Ltd ERCL, which specialises in consultancy for oil exploration, and the international law firm Ashurst, one of the world’s leading firms in oil and gas law, reported WAFA.
Initial studies have indicated that the license area may hold oil reserves ranging between 30 million and 186 million barrels. The tender is available for public bidding, and will be open to bids for a period ending June 30, after which all the bids will be evaluated by the Ministerial Committee with the aid of a technical committee that will be formed for that purpose, and with the assistance of the international consultants who helped in preparing for the tender.
The project as a whole is expected to generate proceeds exceeding $1bn to the PA, including cash inflows in the form of taxes, royalties and other bonuses and payments specified in the model contract for the project, according to WAFA.
“The existence of oil in Palestine is a highly promising opportunity for the Palestinian economy,” Mustafa said. If oil is discovered in the occupied territories it could provide the financial input that the PA needs. “Having local oil supply will alleviate some of the costs borne by the Palestinian economy on oil imports,” Mustafa added.
According to The Associated Press (AP), the project was among a series of initiatives drawn up by Mideast envoy Tony Blair to help develop the PA economy.
The report said that Blair has proposed a multiyear plan for developing the Palestinian economy – an effort that is meant to complement and bolster US-led peace talks with Israel. He has made little headway in carrying out the projects, which focus on eight areas of the economy, including agriculture, construction, tourism and energy.
Progress has been hindered because many of the projects are to take place in Area C – the 60% of Judea and Samaria that is occupied by Israel. In fact, according to a map released by the PA, the exploration area covers a strip of land along the frontier with Israel and in areas currently under Israeli occupation.
Israeli Prime Minister Binyamin Netanyahu’s office had no comment, and Israel’s energy ministry said it was not involved.
On Monday, the PA announced that its total debts had topped $ 4.8 billion, and that the current year’s budgetary deficit was $1.5bn.
