By Lior Zeno

Israel’s offshore natural gas deposits haven’t snagged the large international energy companies, until now. TheMarker has learned that China Petroleum & Chemical Corp., also known as Sinopec, is looking to buy into Israeli drilling licenses with the help of All Energy Holdings.

The two have signed a memorandum of understanding for All Energy to represent Sinopec in gaining access together to the country’s deep-sea exploration licenses as partners.

According to the MOU, Sinopec will provide project funding and industrial know-how while All Energy will take responsibility for smoothing things with the government and the license-granting National Infrastructure Ministry.

All Energy is a private company led by former Mossad chief and Labor MK Danny Yatom with a 3% stake in the company. Other partners are Alexander Gorshkov with 50%, Vladimir Polivoi with 46%, and CEO Lev Mindel with 1%.

Valued at $108 billion, Sinopec, listed as SNP on the New York Stock Exchange, produces and markets energy products such as gasoline, diesel fuel and aviation fuel, and is involved in oil and gas exploration throughout the world.

About a year ago it was reported that Russian natural gas giant Gazprom was interested acquiring a stake in Israel’s gas fields, but international interest has otherwise been bleak. Local industry leaders have been struggling to find experienced international operators but most have stayed away, likely through fear of damaging their relations with oil-rich Arab countries.
Contract with Iran

But there’s a catch to Sinopec’s involvement with Israel, too. In 2007 the company signed a $2 billion agreement with Iran for developing oil fields, one of largest contracts ever entered into by the Shi’ite republic and its first with a Chinese company.

The agreement lets Sinopec develop part of the expansive Yadavaran field, which holds an estimated 12 to 18 billion barrels of oil with a production potential of 85,000 barrels a day.

The question is how this will sit with Israeli and Iranian officials. The two countries don’t generally approve of doing business with companies that cooperate with the other. One of the National Infrastructure Ministry’s criteria for granting exploration licenses regards connections with enemy countries, and Iran in particular.

All Energy said “We ask not to comment as we prefer working unassumingly.”