Israel Nationalized Oil Pipeline Once Part-owned by Iran, Says Chairman

Contrary to policy of military censor, Eilat-Ashkelon Pipeline Company boss Yossi Peled says he is in favor of disclosing information about the top-secret firm that once operated in partnership with Iran.

Aluf Benn
Aluf Benn
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The oil terminal in Eilat that once carried Iranian oil to Ashkelon for export to European markets.
The oil terminal in Eilat that once carried Iranian oil to Ashkelon for export to European markets. Credit: Dr. Avishai Teicher/Wikimedia Commons
Aluf Benn
Aluf Benn

Eilat-Ashkelon Pipeline Company (EAPC) chairman Yossi Peled has confirmed that Israel has nationalized the company, which operates the trans-Israel oil pipeline that used to operate in partnership with Iran. Also, Peled said he was in favor of disclosing information about the company, contrary to the current policy of oversight by the military censor.

Until now, EAPC has been exempt from environmental regulations, planning and building laws, and from government and public scrutiny.

In an interview with Yedioth Ahronoth last week, Peled said, “I’m very uncomfortable with the immunity, but it’s out of my hands. Forty years ago, it was decided that it was secret and it stayed that way. As far as I’m concerned, everything can be released. But Israel is the shareholder, not I.”

EAPC was established in 1968 as a partnership between Israel and the National Iranian Oil Company (NIOC), to build and operate an oil pipeline from Eilat to Ashkelon, plus ports for tankers and storage facilities.

The Shah of Iran wanted to keep the deal secret, and Israel issued an immunity order that subjected the company, its funding sources and fuel sources to the military censor.

The partnership stopped functioning after the 1979 Islamic revolution in Iran, but the immunity was upheld. NIOC is currently in the process of three arbitration actions against Israel or Israeli-owned companies, in a suit demanding billions of dollars’ worth of compensation. The Israel Defense Forces’ censorship is enforcing the immunity order and forbids releasing financial or administrative details about the company’s activity, claiming this strengthens Israel’s position in the financial arbitration.

The company’s former directors abused the immunity granted it and used it to conceal State Comptroller’s Reports that found serious financial and administrative irregularities in the company’s activities. Until now, the company has operated under a shroud of secrecy and no one in it has been brought to trial for negligence, despite last December’s massive oil leak in the Evrona Nature Reserve in southern Israel and the grave comptroller reports.

Despite the state’s official position, Peled told Yedioth that the company is controlled by the government. Speaking about the end of the firm’s franchise, Peled said, “The franchise is about to expire in two-three years and I realized there’s an intention to privatize the company. I suggest against that. Such a body must remain in government ownership.”

Peled’s statement confirmed that Israel had in fact nationalized the part of the company previously owned by the Iranians, despite the military censor’s instructions banning the media from publishing details about the way the company is controlled and managed.

NIOC said in its arbitration suit that Israel has taken over EAPC and ousted its Iranian partners.

Adam Teva V’Din – the Israel Union for Environmental Defense (IUED) – petitioned the High Court of Justice to remove EAPC’s immunity after the massive oil spill at the end of last year. The state at first delayed its response to the petition. Later, the response was delayed due to an ongoing attorneys’ strike.

Some 10 days ago, IUED asked the court to hear its petition without waiting for the state’s response, in view of the public interest in sorting out the issue without further delay.

Former IDF chief censor Col. (res.) Rachel Dolev said in an interview with Army Radio last week that, back in 2002, she asked then-Finance Minister Silvan Shalom to cancel the immunity order on EAPC and other censorship on oil tankers, foreign credit and immigration from needy countries. Her request went unanswered, but her statement implies that she saw no point in continuing to grant the company immunity.

Last week, Channel 2 News reported that IDF chief censor Brig. Gen. Sima Vaknin-Gil demanded that the attorney general hold an investigation to discover who gave Haaretz information about EAPC, following a series of articles on the ongoing arbitration proceedings with Iran.

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