Theory postulated by Luciani Giacomo according to which countries in which there is a steady and significant income from oil, there is no struggle for human rights. The political and social tranquility attained by regimes with a steady income from oil is a result of their ability to fulfill the needs of their citizens, generally free of charge (the citizens pay no taxes). Conversely, a severe drop in oil prices could bring about social and political unrest
The government of Israel determined on 26 December 2004, that Oil Refineries Ltd. (“ORL”) will be privatized by way of splitting the oil refineries into two companies, so that a subsidiary of ORL named Oil Refinery – Ashdod Ltd. (“ORA”) will be established and all it’s shares will be sold, by private sale, as one block. The refinery which was founded in 1972 was thus privatized on September 27, 2006 for 3.25 billion shekels and became a subsidiary of Paz Oil Company Ltd.
The company refines the crude oil into a variety of products which are used in power generation, industrial operations, transportation, the defense establishment and private consumption. The Ashdod Oil Refinery is the first industrial plant to use natural gas in its refining process instead of crude oil as of October 2005. YT and Paz – on 3.9.2004 YT signed an agreement with the Paz Oil Refinery for the total supply of 1.3 bcm of gas over a ten year period or until Paz consumes the total quantity, whichever comes first. The total value of this contract (100%) is about $120 million. Paz completed in March 2009 the construction of a 45 MW cogeneration IPP which will supply all the steam needs and all the electricity needs (25 MW) of the refinery. The remainder electricity will be sold to to the grid or to end consumers. In July 2009 Paz IPP entered into an agreement to supply all of Numonyx’s electricity needs for its factory in Kiryat Gas. Numonyx is owned by Intel (45.1%), the Swiss company ST Microelectronics (48.6%) and the private equity investment company Francisco Partners (6.3%).
In September 2009, Paz launched a second IPP at the Ashdod Oil Refinery, namely a 60 MW cogeneration IPP within the refinery compound. The refinery will consume itself 40 tonsper hour of steam generated from the station. The cost of construction of the IPP is about 200 million shekels. The IPP will be cooled with purified water constructed at the cost of 70 million shekels and the power generated is to be sold to private consumers.
The first station started operations at the end of 2009 and is a 45 MW cogenerations IPPs. The power is used 55% by the Oil Refinery and the rest 45% is sold to Numonix. The steam capacity production is 52 tons of steam an hour which is consumed by the Oil Refinery in Ashdod. The cost of setting up the station was $30-$40 million.
The second station is to start operations at the end of 2012 and is to be a 60 MW cogen. The steam is to be consumed by the Oil Refinery and the electricity is to be sold to private consumers. Cost of set up is $60-70 million
16.5.2011 – The Paz Group that has an IPP at their Oil Refinery in Ashdod has signed a PPA t o sell 1 MW of electricity for 4 years for a total of 10 million shekels to the Beit Levinstein Hospital with sales starting next month at a tariff lower than that of IEC.
Largest oil refinery in Israel, situated in Haifa. The Company has a maximum crude oil refining capacity of approximately 24,800 tons per day (180,000 barrels per day). Over 75% of the Company’s produce goes to local consumption, while the balance is exported, primarily to the Mediterranean basin.
Until 2006 the Oil Refineries (ORL) was a monopoly in the refining of crude oil and the manufacturing of fuel products, and was owned by the state (74%) and Israel corp (26%). In September 2006, the government purchased Israel corp’s share in order to split up and privatize the company. The Ashdod refinery was sold to Paz for 3.25 billion shekels and became the Ashdod Oil Refinery (Baza).
The Haifa refinery was privatized in two stages: first, 44% of the shares were sold to institutional investors and 46% were sold to the Ofer-Federman group; second, Haifa Oil Refinery (Bazan) shares were issued on the TASE. The sale reflected a market cap of 6.25 billion shekels.
During 2007 Israel Corp acquired the controlling interest in ORL for $706 million.
OPEC often debates whether to cut its oil quotas in order to increase prices. >OPEC President Chakib Khelil acknowledged the cartel has little control over prices at the moment because of the slumping world economy, which has considerably reduced demand for oil. He pointed out that cartel countries only produce 40 per cent of the world’s oil. >
Surplus of crude oil and/or gas due to either falling demand or additional sources. In September 2008 OPEC’s president Chakib Khelil said the group was worried about a glut in oil
The first oil embargo began on June 6 1967 as a result of the Six Day War. A number of Middle Eastern countries decided to limit their oil shipments to the West, but these were soon replaced by others such as Iran and Venezuela that jumped on the opportunity to increase their supplies. During the 1973 Yom Kippur War the Arab Nations declared an oil embargo. This caused a severe price increase. The price of a barrel of oil increased from $3 on the eve of the war to $5 within a year and then increased to $12 and eventually to $30 by 1980. In 1973 Israel was willing to pay $17 a barrel as long as supplies continued to flow. President Nixon’s refusal to stop supplying Israel with arms and Holland’s support of Israel led to a total embargo by OPEC to these two countries.
In the oil sector, there are large oil companies operating known as the majors, independent companies known as IOC and state oil companies known as NOC
The term “majors” on its own is used to denote the large global oil and gas companies. Supermajors is used to denote the largest of them. The majors include ENI, while some of the supermajors include Aramco, NIOC, ExxonMobil, Gazprom, BP, Royal Dutch Shell, Chevron, ConocoPhillips, Total and others.
Smaller companies are referred to as midcaps, juniors, small oilcos.
The drilling mechanism used for drilling into the sea floor is much the same as can be found on an onshore rig. However, while with onshore drilling the ground provides a platform from which to drill, at sea an artificial drilling platform must be constructed. Drilling offshore dates back to 1869, when one of the first patents was granted to T.F. Rowland for his offshore drilling rig design. It wasn’t until after 1947 that the first offshore well was drilled in the Gulf of Mexico.
