Energy Ministry Challenges Committee Veto on Shapir's Ashdod Refinery Takeover

Energy Ministry Director-General Yossi Dayan has formally challenged the Concentrator Committee's recommendation against Shapir Engineering's takeover of the Ashdod Oil Refinery (PAZ), emphasizing the facility's critical importance to Israel's national energy security. In a letter to Government Companies Authority Director Roy Kahlon, Dayan argued that the refinery is indispensable for domestic refined product manufacturing, a role that will become even more vital once Haifa's Bazan refineries are decommissioned around 2030.

While the committee's majority expressed concerns over Shapir's expanding footprint across eight critical infrastructure sectors—including light rail networks, toll roads, and defense projects—Dayan countered that Ashdod requires a stable controlling shareholder capable of injecting substantial capital. Shapir holds options to raise its stake from 10% to 65%, a move expected to infuse approximately 2 billion shekels into upgrading and maintaining the facility, which lacks the economies of scale and petrochemical integration of larger counterparts.

The Ashdod facility has navigated a turbulent period, sustaining an estimated 130 million dollars in equipment damage following contaminated oil shipments from BP after recent regional escalations, alongside regulatory penalties and a fatal workplace accident in February. Supporting National Economic Council Chairman Avi Simhon's minority view, Dayan insisted that robust corporate governance and a dedicated controlling owner are essential to ensure the refinery's operational survival.