| No. | Document (CFB/Schedule) | Item No. | Query | Answer/Clarification |
| 14 | | | Is there any restriction in terms of nationality of the company submitting the Bid? Can we submit the Bid with a foreign entity? | Apart from the four countries listed under the Trade with the Enemy Ordinance of 1939 (Iran, Iraq, Syria and Lebanon), there is no restriction with regard to the nationality of the company submitting the bid. Please note that in accordance with Paragraph 11.10 of the Call for Bids, "The Commissioner, with the Minister's approval, will have the right to disregard a bid in the circumstances specified in Regulation 11 of the Offshore Regulations, i.e, 'for reasons of state security, foreign relations or international commercial ties (…) [including] the event that the controlling shareholder in the applicant for the petroleum right or the applicant for authorization as an operator is a foreign country or if there are other special circumstances with respect to which authorization of the application would not benefit the public interest or the energy market in Israel'". |
| 15 | | | Is there any restriction in terms of nationality of the company signing the License and running the activity? | Apart from the four countries listed under the Trade with the Enemy Ordinance of 1939 (Iran, Iraq, Syria and Lebanon), there is no restriction with regard to the nationality of the company awarded the license and running the activity. Please note that in accordance with Paragraph 11.10 of the Call for Bids, "The Commissioner, with the Minister's approval, will have the right to disregard a bid in the circumstances specified in Regulation 11 of the Offshore Regulations, i.e, 'for reasons of state security, foreign relations or international commercial ties (…) [including] the event that the controlling shareholder in the applicant for the petroleum right or the applicant for authorization as an operator is a foreign country or if there are other special circumstances with respect to which authorization of the application would not benefit the public interest or the energy market in Israel'". Additionally, please note that foreign companies operating in Israel need to register with the Registrar of Companies in Israel and the Israel Tax Authority. |
| 16 | | | In case of a participation in a consortium, is it acceptable that Bidders submit separate bid bonds representing their proportionate shares of the required bond (as it is envisaged for the bank guarantees)? | In case of a consortium, each member of the consortium will be required to submit a separate bid bond in accordance with its share in the bid. For example, if the required value of the bid bond is $4 million, a company whose share in the bid is 40% will be required to post a bid bond with a value of $1.6 million. |
| 17 | | | Petroleum Profit Levy: How is the taxable profit of Petroleum Profit Levy determined? According to fiscal and financial arrangements published in the website of Ministry of Energy , R-Factor is calculated as follows: R Factor = Net cumulative revenues / Exploration and development expenses. How is the Net Cumulative Revenue calculated? Gross revenue net of Royalty, Opex or both? What is the sliding scale table of the progressive levy ranging from 20% to 50% based on the R-factor? Corporate Income Tax: Determination of taxable income. Please kindly confirm or correct the methodology of the taxable income calculation as follows: + Gross Revenues Royalty Opex Fees Abandonment Capex depreciation generally on a straight-line basis Petroleum Profit Levy Losses carry forward (losses may be carried forward without time limit) Please specify the Capex depreciation method to be applied. If applicable, how is abandonment cost taken into account as a deductible item in the taxable income calculation (e.g. abandonment fund)? | The Petroleum Profit Levy and Corporate Income Tax are administered and collected by the Israel Tax Authority (as opposed to royalties, which are administered and collected by the Ministry of Energy and Infrastructure). The information provided on the OBR4 website is for informational purposes only. For detailed and authoritative information, we invite you to review the applicable legislation and seek professional advice. The following links point to the binding Hebrew version of the relevant legislation: Income Tax Ordinance Natural Resources Profit Tax Law of 2011 |
| 18 | CFB | Article 11 | Is there further restrictions to participants which are not new entrants, or to consortium with existing lease holders, other than those stated in the CFB ? In particular, art. 11.8(b)(v) CFB contemplates that "A producing lease holder that holds an existing interest in 50% or more of producing leases under the Petroleum Law will be subject to additional restrictions that result from these holdings" => what are those restrictions ? | In the event that a bid is submitted by a producing lease holder that holds an existing interest in 50% or more of the number of producing leases under the Petroleum Law, such a bid will be reviewed by the Petroleum Commissioner in consultation with the Competition Authority in order to determine the exact restrictions to be applied. This does not derogate from any provisions of Article 11.8 in particular or the CFB in general. |
| 19 | CFB | | The bidder may rely on its Affiliate to prove financial capacity and experience through signed undertakings of the bidder and affiliate. The CFB provides that prequalification as Operator is possible before submission of the final bid. However, practically speaking the undertakings would rather be signed at the time of the final bid. => Can the operator send a prequalification dossier without the signed undertakings, provided that said undertakings will be included in final bid? => Will we still benefit from comments of Ministry if prequalification dossier does not include the undertakings? | The Ministry confirms that the prequalification dossier may be sent without the signed undertakings, it being made clear that the approval of the final bid will be contingent upon the submission of all necessary documents. |
| 20 | CFB | | Do you confirm that pre-qualification (before final bid) is only for the operator, not for non-operating members of a consortium ? | The pre-qualification process relates to proposed operators only. |
| 21 | CFB | | Can all the bid documents (proof of bidder's experience, guarantees, etc.) be submitted only in English? | The Ministry confirms that all the bid documents may be submitted in English only. |
| 22 | CFB/Schedule 4 | | The CFB (p. 42) says that "The Commissioner will not approve an operator unless it directly employs experienced employees who have at least 5 years of training and experience". The company bidding as operator may have no direct employment at the time of the bid as recruitment would follow the award of the licence. Can the Operator rely on its affiliates' employees in that regard, and be qualified with no direct employees ? | Article 6e of the Offshore Regulations, including with regard to the requirement for "experienced employees who have at least 5 years of training and experience", applies for the purpose of submitting a bid. |
| 23 | CFB | | Do the Ministry's clarifications/answers in the Q&A have the legal status of a regulation ? What is the legal qualification and effects of said clarifications/answers ? | The Ministry's clarifications/answers in the Q&A should be viewed as an integral part of the Call for Bids and have an equal status to it. The Call for Bids does not have the status of legislation, but is an official procedure conducted in accordance with and subject to the Petroleum Law. |
| 24 | CFB | Article 11.8 | It reads that: "to encourage the competition within the domestic natural gas arket, two producing lease holders may submit a bid within a consortium provided that they don't hold existing interest in different producing fields". Article 11.8.b.iv also says that if a bid is submitted by 2 prodution holders and new entrant holding more than 50%,it can be successful only if a separate gas sale agreement is in place. => Can a bid submitted by two production holders holding interests in two different producing fields and a new entrant holding more than 50% be successful if a separate gas sale agreement is in place? | Article 11.8b(i) of the CFB states that "if two or more producing lease holders hold an existing interest in different producing fields, they may not form part of the same consortium." This limitation applies regardless of the identity of other members of the consortium or the existence of a separate gas sale agreement. |
| 25 | Schedule 6 | | Could the Ministry please confirm that the Disclosing Party also undertakes to treat as strictly confidential, and not to disclose to anyone, the fact or substance of Receiving Party's interest in or participation in the CFB, or discussions and negotiations between the Receiving Party and the Disclosing Party relating to the CFB without the prior written consent of Receiving Party? | In accordance with Article 12.3 of the CFB, "The identity of the bidders that will not be granted licences will not be disclosed except as required by law or under the provisions of this CFB, or if previously disclosed by the bidder itself." This applies also to the fact or substance of Receiving Party's interest in or participation in the CFB, or discussions and negotiations between the Receiving Party and the Disclosing Party relating to the CFB. |