Bazan CEO Calls Refinery Closure Plan 'Populist Obsession'

The CEO of Bazan, Rafael Maman, has criticized the Israeli government's plan to close the country's sole oil refinery, Bazan, calling it a 'populist obsession' that is disconnected from reality. Speaking at a conference, Maman argued that relying solely on imported fuel, especially during emergencies, is a flawed concept, citing potential dependence on political whims like those of Turkey's President Erdogan.

Maman explained that the global fuel crisis is not due to a shortage of crude oil but rather a deficit in refined products. He pointed to Ukrainian attacks on Russian refineries, which have halved Russia's production capacity, and China's halt on exports as major factors contributing to market pressure. These events, along with a general decline in global refining capacity versus demand, have led to record valuations for energy companies involved in refining, including Bazan.

Regarding the government's 2022 decision to close Bazan within five years of meeting certain infrastructure prerequisites, Maman stated that the work has not even begun, making the original timeline irrelevant. He believes that professional understanding within the government has shifted, recognizing Israel's need for independent refining capabilities. He dismissed the idea of closing Bazan by October 7th as a 'conception' that has since become a 'populist obsession'.

Maman also addressed claims of Bazan demanding $5 billion in compensation, clarifying that the company merely highlighted its current market valuation, which has significantly increased due to the energy crisis, reflecting the strong performance of refining assets. He assured that the refinery is operating at full capacity and in excellent condition, having recovered quickly from recent direct hits, which he asserted posed no danger to the surrounding city of Haifa.

While acknowledging that having multiple refineries would be ideal for Israel's energy security and export potential, Maman expressed doubt about new refineries being built. He reiterated that the recent incidents at the Haifa refinery were contained and manageable, demonstrating the facility's resilience.