Dueling Companies Hash Out Accord on Benjamin Prospect

Teddy Sagi, Larry Mizel can be registered as rights holders.

After a year of legal wrangling an agreement has been hashed out among a business group belonging to American businessman Larry Mizel; Teddy Sagi's business group and the Israeli oil exploration partnership Lapidoth Heletz over exploration rights in the Benjamin prospect. The settlement paves the way for them to register as legal owners of oil exploration rights. Although the parties were awarded tenders a year ago the registration was never done.

In June 2010 the Director of the National Infrastructure Ministry's natural resources licensing administration, Yaakov Mimran, issued the offshore gas exploration licenses that triggered the legal disputes.

Teddy Sagi
Nick Clarke

Lapidoth Heletz said on Tuesday said it would forgo its 12% rights in the Benjamin South prospect (CCL-2 ) in favor of Coleridge.

Mizel's business group will forgo its 12% right to the Benjamin North prospect in favor of Sagi and Lapidoth. And that ends the spat that began in June of last year.

The two Benjamin prospects lie over 1,600 square kilometers of seabed, southeast of the Sara and Myra prospects. In the past the Canadian company Petromed had held rights to all of Benjamin, as well as to Sara and Myra. Petromed sold the latter to ILD Energy, which belongs to Ofer Nimrodi, and to Modiin Energy, which belongs to Yitzhak Sultan and Nochi Dankner's IDB group.

While the ministry did not obstruct the sale of the Sara and Myra prospects (approving the transfers in March 2010 ), it later expropriated the Benjamin prospect after Petromed failed to meet the terms of its license. Thus when the petroleum board convened in June 2010, it divided the Benjamin prospect in two.

In addition to Mizel and Sagi, Isramco and the Nimrodi-Sultan group (ILD Energy teamed with Modiin ) also bid for Benjamin prospects.

But Mizel did not approve of the way Benjamin had been split, and the groups neglected to pay the NIS 30,000 license fees to the ministry. As a result, they are not registered as having rights to the Benjamin prospects. Now that agreements have been reached they can pay the outstanding fees and receive legal possession of the prospects.

This will be Mizel's first entry into Israeli petroleum exploration. Sagi already owns a 42.5% interest in six licenses.