Avner Oil - Annual Report 2011 - Delek Energy Systems

B. The operator of an offshore right is required to have experience in two of thefollowing areas:1) Oil exploration projects amounting to at least USD 100 million in oneoffshore oil field in the last five years2) Management and supervision of drilling at a water depth corresponding tothat of the right in which it serves as operator, as follows: Up to 500 meters,up to 1,000 meters and more than 1,000 meters. For this purpose, the waterdepth will be determined according to the deepest part of the area coveredby the right.(3) In applications for licenses by virtue of a priority right, applications to transfer rightsunder section 76 of the Petroleum Law and applications for an additional areapursuant to section 49 of the Petroleum Law, the financial robustness will be assessedaccording to the proportionate share of each licensee. The applicants will comply withthe requirements set out in the March 2010 guidelines and present a letter ofundertaking to meet the financial requirements. Compliance with the financialrequirements may be demonstrated by one partner in the right, holding at least 10%.(4) In applications that include an operator registered in a foreign country questionnairesregarding foreign relations and trade with other countries, which are available at theCommissioner’s office should be submitted.(5) Furthermore, the guidelines published by the Commissioner in August 2011 andNovember 2011 (prior to discussions conducted at the Petroleum Council inSeptember 2011 and December 2011, respectively), also stipulate that applicationsunder section 76 of the Petroleum Law would be discussed in view of the explicitprinciples in the draft regulations for the transfer of oil rights and that applicationsunder section 76 of the Petroleum Law should be filed in accordance with theguidelines prescribed in this regard in the draft regulations and that all the documentsindicating compliance with the requirements as set out in the draft regulations and theMarch 2010 guidelines, even if not explicitly noted (for information about the draftregulations see below).(C)On November 8, 2011 the Ministry of Energy published an updated draft of the regulationsfor transferring of oil rights for the purpose of regulating the procedures for filing applicationsfor transferring oil rights by setting guiding conditions according to which the Commissionermay accept such application, stipulate various conditions, apply the regulations for thetransfer 170 of oil rights 171 and of benefits relating to oil rights 172 for which a transferapplication is filed following the publication of the regulations. If an application for the transferof oil rights or of benefits relating to oil rights was pending on the date of publication of theregulations and a decision was not yet given, the applicants are entitled to request that theregulations be applicable to it.The main points of the provisions of the draft regulations to transfer oil rights are as follows:170171172Under the draft regulations, "transfer" means the transfer by any manner whatsoever, other than through inheritance,whether for payment or not, including the following: (1) the transfer of oil rights between members of a group underan agreement between them; (2) the transfer or assignment of means of control which separately or together withthe transferee's previous means of control will grant the transferee or to whomsoever the means of control areassigned, accordingly, benefits relating to oil rights; (3) granting an option to receive any of the above. With regard tothe transfer of control - including the transfer of means of control which, together with the means of control held bythe transferee prior to the transfer, awards him control.Under the draft regulations "oil rights" refers to a preliminary permit, license or lease, or any part of any of these,respectively.Under the draft regulations "benefit relating to oil rights", "benefit relating to preliminary permit", "benefit relating tolicense" and "benefit relating to a lease" mean any of the following: (1) control in a company or group which is theholder of a preliminary permit, license or lease, accordingly; (2) a holding of more than 25% of a certain type ofmeans of control in a company or in a group that is the holder of a preliminary permit, license or lease, accordingly;(3) the right to receive profits, royalties or information from the holder of a preliminary permit, license or lease,accordingly, directly or indirectly, other than by way of control or holding of the means of control or holding of theright to participate in its profits or right to a share of the balance of its assets upon liquidation. In this regard"information" means any information received by the holder of oil rights due to actions taken in accordance with theoil right or the preceding oil right.A-155