Avner Oil - Annual Report 2011 - Delek Energy Systems

Furthermore, the draft regulations stipulate that if the same individual controls both thetransferor and the transferee, there is no need for compliance with the terms set out insubsection 4(a) through (g) and subsections 5 and 6 above, respectively.(10) Under the draft regulations, permission may be granted to transfer rights to receiveprofits, to receive royalties or to receive information that is obtained by the holder ofthe oil right due to its operations under the oil right or the preceding oil right, also if allthe conditions specified in subsections 3, 4, 5, 6 or 7 above have not been fulfilled,respectively.(11) Under the draft regulations, prior approval may be given, when granting a license orthereafter, in the terms included therein, for types of transfers of the license or of thebenefit relating to the license between members of a group.(12) Approval for granting of an option:The draft regulations state that, with regard to granting an option to transfer oil rightsbetween members of a group under an agreement between them, or granting anoption to transfer or assign the means of control which, separately or together with thetransferee's previous means of control will grant the transferee or the entity to whomthe means of control are assigned, accordingly, benefits relating to oil rights, for whichthe terms explicitly stipulate that exercise requires prior approval of the Commissioner,the following provisions will be applicable: (a) an application will be filed in accordancewith the provisions of subsection 1(a) and 1(b) and consent to the application and thedocument including the foregoing terms will be attached thereto. In addition, theCommissioner may request additional details and documents, as set out in subsection2 above; (b) if the Commissioner does not request additional details and documentsand does not issue notice of his objection within 30 days from the date of filing of theapplication, the application will be deemed as approved; (c) if the Commissionrequests additional details and documents within 30 days from the date of filing of theapplication, and the Commissioner does not issue notice of his objection within 30days from the date of filing of the application, the application will be deemed asapproved.(13) Under the draft regulations, the Commissioner will not permit the transfer of oil rightsand of a benefit relating to an oil right if in his opinion of the following exists: (a) thetransfer may significantly harm competition in the exploration and production area; (b)the transfer may harm the security of the State of Israel or its foreign relations; (c) thetransferee or the holder of control therein violates the provisions of the Petroleum Lawrelating to other oil rights that he holds or did hold, or the terms of such oil rights, oracted with regard to foregoing oil rights ineffectively or irresponsibly, and therefore isnot worthy of being a holder of oil rights; (d) the transferee or holder of control thereinor officer of any of them is convicted of an offense which due to its nature, severity orcircumstances is not worthy of being a holder of an oil right; (e) there are other specialcircumstances due to which the transfer is not for the benefit of the public and theenergy sector in Israel.(14) Placing a lien on a license or lease: Under the draft regulations, an individualrequesting to place a lien on a license or lease or pledging a benefit relating to alicense of lease will attached the pledge agreement contingent upon receiving thepermission of the Commissioner to his application as well as other information anddocuments that the Commissioner will require. The draft regulations stipulate that acharge placed on a license or lease prior to the beginning of commercial production ispermissible if the lien is intended to serve as collateral for the following purposes: (a)receipt of a loan to finance execution of the operations that the licensee or the leaseholder, accordingly, are required to carry out under the Petroleum Law, the terms ofthe license or the lease and the work plan; (b) to secure the right to receive royalties.Furthermore, the draft regulations also stipulate that a charge placed on a lease afterthe beginning of commercial production and a pledge of a benefit relating to a licenseor lease are permissible if the lien is intended to serve as collateral for the foregoingpurposes, and for other purposes if the Commissioner, after consulting with thepetroleum council, decides that it will not harm the ability of the licensee or leaseholder, accordingly, to comply with the provisions of the Petroleum Law and the termsof the license or the lease, accordingly. In addition, the draft regulations clarify that theright to place a charge is not a right to transfer the pledged rights, and if compliancewith the terms for exercising the lien will not cause the transfer of the license or leaseA-159