The Petroleum Law & Regulations

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​The Israeli Petroleum Law was enacted in 1952 and underwent substantial amendment in 1965.  The Law governs the exploration and production of petroleum in the land and marine areas of Israel, including its continental shelf.  "Petroleum" is defined in the law as "any petroleum fluid, whether liquid or gaseous, and includes oil, natural gas, natural gasoline, condensates and related fluid hydrocarbons, and also asphalt and other solid petroleum hydrocarbons when dissolved in and producible with fluid petroleum".

Petroleum resources are the property of the State, whether or not located on state lands.  No person is allowed to explore for or produce petroleum without receiving a right under the Law. The Law provides for three types of rights, two relevant to the exploration stage, and the third for production.  The lowest level right is the preliminary permit, which may be granted for a period not exceeding 18 months and allows the permit holder to conduct preliminary investigations.

The second type of right is the license, granting an exclusive right for further exploration work, and requiring the drilling of wells.  The maximum term of a license is seven years.  A license area may not exceed 400 km2 (approximately 100,000 acres). The initial license term is 3 years, extendible to a maximum period of 7 years (and additional 2 years upon discovery of petroleum and for specific purpose).

Upon commercial discovery of petroleum, the licensee may apply for the third type of right, which is a production lease, the area of which may not exceed 250,000 dunams (approximately 62,000 acres). The initial lease term is 30 years, extendible to a maximum period of 50 years. A lease confers upon its owner the exclusive right to explore for and produce petroleum in the lease area and requires the production of petroleum in commercial quantities. A lessee is entitled to transport and market the petroleum produced, however, the Minister may requires to supply domestic needs first, at market price.  A lessee is liable for paying the market value at the wellhead of royalties of one-eighth (12 1/2 %) of the quantity of petroleum produced from the lease area, excluding the quantity used in operating the lease area. 

The holder of a petroleum is required, in accordance with the guidelines of the Petroleum Commissioner, to submit guarantees, as well as yearly fees, and petroleum profits levy.

The holder of a petroleum right is expected to carry out his operations with due diligence; in accordance with the accepted practice in the petroleum industry; and to submit progress and final reports on its work. 

The Law provides for an administrative structure, headed by the Petroleum Commissioner who acts partly in consultation with the Petroleum Council. The enforcement of the Petroleum Law is under the responsibility of the Minister of National Infrastructure, Energy and water Resources.

Applications for petroleum rights are submitted to the Petroleum Commissioner, in accordance with the provisions set out in the Law, its Regulations, and the Guidelines applicable as the case may be.

The award of petroleum rights, with the exception of the preliminary permit and priority right is published in the Petroleum Register and in the official governmental gazette (Reshumot).


The English version of all legislation is a non-binding, unofficial translation from the original, binding, Hebrew version and is published for the convenience of the Public. Only the Hebrew version, as officially published in the official gazette (Reshumot) shall be binding.

 

Relevant Files:

Synopsis Of The Israel Petroleum Law and Regulations

The Law

The Israel Petroleum Law – Contents

Petroleum  Law, 1952