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Originally published March 18, 2014 at 2:24 PM | Page modified March 19, 2014 at 11:20 AM

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Palestinians seek to drill for oil in West Bank

The Palestinian Authority on Tuesday announced plans to explore for oil in the West Bank, throwing a new element of uncertainty and confusion into troubled U.S.-backed peace efforts.


Associated Press

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JERUSALEM —

The Palestinian Authority on Tuesday announced plans to explore for oil in the West Bank, throwing a new element of uncertainty and confusion into troubled U.S.-backed peace efforts.

The Palestinians proclaimed the project, close to a small oil field in Israel in which an Israel firm is drilling, a key step toward their dream of developing the local economy and gaining independence in the West Bank. But Israel, which wields overall control of the area, gave no indication it has agreed to the plan.

Mohammed Mustafa, the Palestinians' deputy prime minister for economic affairs, said the Palestinians were seeking proposals from international firms to explore and develop oil in the northern West Bank.

He said the project was among a series of initiatives drawn up by Mideast envoy Tony Blair to help develop the Palestinian economy. "The Palestinian people have the right to use their resources," he told The Associated Press.

Blair has proposed a multiyear plan for developing the Palestinian economy -- an effort that is meant to complement and bolster U.S.-led peace talks. But the former British prime minister has made little headway in carrying out the projects, which focus on eight areas of the economy, including agriculture, construction, tourism and energy.

Progress has been hindered because many of the projects are to take place in the 60 percent of the West Bank that was left under full Israeli control under interim peace deals two decades ago. The Palestinians say they cannot establish a viable state without being allowed to develop this area and say routinely stifles attempts to do so.

According to a map released by the Palestinians, the exploration area covers more than 400 square kilometers (155 square miles) in a strip of land along the frontier with Israel. Most, if not all, of this land, remains under full Israeli control.

In a statement, Blair's office said "the energy sector is indeed one of the eight sectors" including in Blair's initiative. "Reliable energy supply is critical for the expansion and development of all sectors of the Palestinian economy." The statement made no reference to the project announced Tuesday and gave no details on where any West Bank oil projects might take place.

Israeli Prime Minister Benjamin Netanyahu's office had no comment, and Israel's energy ministry said it was not involved. The Palestinian announcement appeared to lay the groundwork for a new area of protracted negotiations with Israel. International bodies, including the World Bank, have urged Israel to lift restrictions on Palestinian development in Israeli-controlled areas of the West Bank.

In his announcement, Mustafa, a U.S.-educated economist and former official at the World Bank, said initial studies have indicated the exploration area may hold oil reserves of 30 million to 186 million barrels. While not large in global terms, he said the project could generate proceeds of roughly $1 billion for the Palestinian government, including taxes and royalties. The government will accept bids from potential partners through June.

"The existence of oil in Palestine is a highly promising opportunity for the Palestinian economy," he said.

In contrast to their energy-rich neighbors, Israel and the Palestinian areas have historically had few natural resources to exploit. In recent years, Israel has developed natural gas fields off its Mediterranean coast. It also has begun pumping oil from a small field located near the boundary with the West Bank, close to the area the Palestinians hope to exploit.

Giora Eiland, the acting chief executive of Israeli oil firm Givot Olam, declined to comment on the Palestinian plan, but said his company "absolutely" does not take any oil from the Palestinian side.

"We only have vertical drills, and all of them are located on the Israeli side," he said.



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