Israel’s economic, political and defense situation is expected to improve as a result of the discovery of oil in the Negev last Friday, it was reported here today. First estimate of the production capacity of the well brought in at Huleikat, 30 miles south of here and six miles northeast of the Egyptian-held Gaza strip. was that it might yield 100,000 tons annually, about ten percent of Israel’s total need, which she now imports at a cost of about $40,000,000.
Oil was found at 4,906 feet in a well which had been started by the Iraq Petroleum Company, a British corporation, which had abandoned the hole when the Mandatory Government was forced to quit Palestine upon the birth of Israel. Dov Joseph, Development Minister, claimed that the first strike had revealed oil in “commercial quantities.” It was found to be of high quality, equaling that the Arabian Gulf oil fields of Kuwait, Not only is the discovery of oil liable to lead to a reduction of Israel’s expenditure of foreign currency, but also to a resumption of major operations at the Haifa oil refineries.
The dome formation in which oil was found is similar in structure to rock formations found throughout the length of the Israel coastal plain and extending along the Gaza strip frontier area southward toward the Egyptian Sinai Peninsula. The strike was made by the Lapidoth Oil Company. This concern is a joint venture of the Mekoroth Water Company, itself an enterprise set up by the Histadrut, the Israel Labor Federation, and of the American-Israel Petroleum Corporation. American-Israel Petroleum is largely controlled by the Ampal-American Israel Corporation of New York, and by the Israel Industrial and Mineral Development Corporation, which was set up by Ampal in 1953. In addition, there is a small group of private investors in American-Israel Petroleum.
Earlier this week, stockholders of Israel Industrial and Mineral voted a four for one split of outstanding $100 par value stock and registration of a new $5 million issue at $25 par value per share. The company also declared a first dividend of $3,00 per share on its common stock.
Max Orovitz, of Miami, Fla, and Jekutiel Federman, of Haifa, who head the American investors group for oil research and Israeli Oil Prospectors, Ltd, respectively–companies which, in cooperation with the Lapidot Company, drilled for the well,–announced that American experts estimate the first well brought in Israel might yield 50 to 70 barrels per hour. That would be 100,000 tons annually.
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