Bazan Oil Refineries Demands Over $5 Billion for Haifa Evacuation
Bazan Oil Refineries has presented a demand of over $5 billion, approximately 16 billion shekels, to the Israeli government for its relocation from the Haifa Bay area. This figure is more than double the company's current market value on the stock exchange, which stands at around 7.2 billion shekels. The demand was put forth during discussions by an inter-ministerial team, led by Professor Avi Simhon, head of the National Economic Council, which is re-evaluating the premises behind the government's decision to evacuate the refineries by the end of the decade.
Bazan's calculation is based on recent valuations by BDO and KPMG, ranging from $3.2 to $3.8 billion, with an additional $600 to $800 million added to account for refining margins and projected future profitability. The company also claims this estimate does not include hundreds of millions of dollars in damages incurred since the state began promoting the evacuation, nor the full costs of closing facilities, dismantling equipment, and clearing the land. Furthermore, Bazan insists the state must provide for affected employees.
Conversely, the government is attempting to manage expectations. Simhon acknowledged that discussions about compensation are ongoing but stated the amount "does not approach" what Bazan has presented, indicating a multi-billion dollar gap between the parties. Bazan's significant demand stems partly from its land lease agreement from 2007, which grants it a 49-year lease with an option for another 49 years, giving it perceived rights to operate in the complex for decades to come.
The re-evaluation of the evacuation plan, initiated by Simhon's professional team in July, follows a State Comptroller report that raised questions about the energy security implications and Israel's ability to guarantee fuel supplies during emergencies. The plan involves replacing some domestic refining capacity with imported refined products, necessitating new storage, unloading, and transport infrastructure, much of which is not yet complete. Recent conflicts have highlighted the risks associated with reliance on imports.
Bazan argues that the war, which physically damaged its facilities and killed three workers, proves that a country surrounded by threats cannot be entirely dependent on imported fuels. The company's recent financial performance has complicated the state's assessment. In the second quarter of 2026, Bazan reported a net profit of approximately $263 million, a significant turnaround from a $37 million loss in the same period last year, driven by soaring refining margins and insurance payouts totaling around $245 million following missile strikes. This improved performance allowed Bazan to declare a $120 million dividend, bolstering its argument that it is not a failing enterprise but a profitable operation with strategic value.
