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You win some, you lose some. First The Israel Corporation made a monkey of the state, with the help of star attorney Ram Caspi. Now it's the state's turn to make a monkey of the Ofer brothers.

The Ofers, via The Israel Corporation, bought out the state's holdings in Zim for a song. Now it's the state's turn to stick a banana to the concern, and buy its holdings in Oil Refineries at about half of the stock's value.

That isn't how the story was supposed to turn out.

Until a few months ago, The Israel Corporation had been confident it was the one reaming the state yet again, thanks to the 2002 nefarious agreement with the Finance Ministry.

According to the agreement, the state agreed to give the Ofers $120 million for their 26 percent interest in Oil Refineries, and the mutters, actually roars of outrage, began. "Again the state is handing millions over to the Ofers," the papers bawled, and treasury officials began sweating to turn the clock backward, hoping desperately to improve the accord's terms.

It didn't work. The Israel Corporation accused the state of bad faith, of breaching a signed agreement, and threatened to sue. With legal gorilla Caspi at its side, it won. A few months ago, the agreement was officially ratified and that was that.

But what do you know: Life moved on, circumstances changed, and now the state is all too happy to fork over $120 million for those Oil Refineries shares.

Oil is trading at record highs of around $70 per barrel, resulting in enormous profit hikes at refineries worldwide. Oil Refineries profits shot up, from NIS 773 million for all of 2004, to NIS 680 million in the first half of 2005 alone. Hurricane Katrina destroyed no small part of America's oil production capacity, and assured that oil prices would continue to climb, making oil refineries a red-hot business.

Oil refineries on sale were snapped up like hotcakes. Oil Refineries itself is a monopoly consisting of two refineries, one in Haifa and one in Ashdod. The state intends to split the company into two entities, each with one refinery, and the 26 percent that the Ofers owned is worth a lot, lot more than $120 million.

The most conservative estimate of Oil Refineries today values the company at $800 million. Less conservative estimates talk of up to $2 billion, which would make that 26 percent worth at least $200 million, or even more.

State of gracefulness

Nobody at the Prime Minister's Office, Finance Ministry, Justice Ministry or National Infrastructures Ministry would be so crass to admit it, but they're rubbing their hands with glee. Now they have a chance to pay The Israel Corporation back for their humiliation over Zim. Revenge at last!

Only one thing holds back the officials from exacting retribution. Actually, two things.

One is National Infrastructures Minister Benjamin Ben-Eliezer, who opposes splitting up Oil Refineries into two competing companies (naturally that has nothing to do with the fact that party primaries are approaching like a freight train, and Oil Refineries has thousands of workers and enormous clout in the party center). The other is Prime Minister Ariel Sharon, who has agreed to let Ben-Eliezer raise his objections at the next cabinet debate.

Four separate panels discussing the restructuring of Oil Refineries have recommended splitting the company. Three government resolutions have been passed to accept the recommendation. Nobody opposes the concept except Oil Refineries workers, who hope that opposing the split (with Ben-Eliezer's generous assistance) will delay privatization.

Most of all, however, Fuad's opposition to splitting the company means that a fifth committee will be set up to reexamine the best structure for Oil Refineries. And that means another two to three years' delay in privatizing the company. It means the state runs a grave risk of missing the best possible moment for selling one or both of the refineries, while oil is at an all-time high and the agreement with the Ofers is in force. It means a grave risk that the banana the state is holding out to the Ofers will wilt in its hand.

Treasury officials know that perfectly well, as does Prime Minister's Office Director General Ilan Cohen. They know that Israel has a history of missing golden opportunities, at least as far as privatization is concerned. They know that reopening the debate is a recipe for yet another missed opportunity, benefiting nobody except Oil Refineries workers and the Ofers, who'd have a chance to wriggle out of that agreement and save themselves from choking on banana.

It is highly doubtful that the prime minister wants to go down in history as the one helping them out.