Bazan Chairman: "Investing in Israel, in a state of uncertainty, would be irresponsible to our investors"
Bazan Chairman Moshe Kaplinsky stated that the company prefers to invest abroad due to uncertainty regarding the future of Israel's refining sector and government plans for its closure.
"We have quite a few plans to develop the refinery's operations, and this is the right time to expand output and streamline operations. However, we think it is right to put our next dollar abroad, because investing in Israel in a state of uncertainty would be irresponsible to our investors," said Bazan Chairman Moshe Kaplinsky in a conversation with Calcalist following the publication of the company's financial reports.
Kaplinsky referred to the government's moves to close Bazan at the beginning of the next decade and to base the Israeli energy market on imported fuels. According to him, the lack of certainty regarding the future of Bazan's operations has already led to the shelving of a plan to build a 400-megawatt power plant within the complex.
"We could have expanded Bazan's capabilities, and today we are still investing a lot of money, but it is directed towards maintaining the current situation and the company's efficiency. Together with the power plant we did not build and other plans that did not materialize, we are talking about investments in the amount of several hundred million shekels." Bazan CEO Rafael Maman added that without government restrictions, the company would certainly have embarked on extensive investments to increase refining capabilities.
The plan to close Bazan is led by the Prime Minister's economic advisor, Prof. Avi Simhon, who heads the National Economic Council. Last month, it was revealed that Simhon appointed a team to examine ways to accelerate the evacuation of Bazan, considering potential delays in building fuel storage facilities and the changing geopolitical landscape in the Middle East.
The government's decision in 2022 mandated the evacuation of the refineries by the end of 2029, though current estimates suggest it will not be possible before 2030. Meanwhile, Energy Minister Eli Cohen believes that instead of closing Bazan, its operations should be moved to the south of the country, a move that could take many years and cost billions of shekels.
"Israel cannot rely on the import of distillates in a reality where any minor change can create a shortage. Stocks all over the world are running out, and here in Israel these hardships are not felt due to our own refining capabilities," Kaplinsky noted.
Against this background, Bazan presented a sharp increase in financial results for the second quarter. The refining margin rose to $17.9 per barrel, compared to $10.5 in the second quarter of 2025. This growth reflects the impact of tensions, including disruptions in oil supply, the blocking of the Strait of Hormuz, and the ongoing conflict in Eastern Europe.
In the quarter, Bazan recorded a net profit of $263 million, compared to a loss of $37 million in the corresponding quarter last year, and its neutralized EBITDA jumped to $317 million. Additionally, Bazan benefited from the recognition of $71 million in insurance revenues for losses following a missile strike in June 2025. The board of directors decided to distribute a dividend of $120 million to shareholders.
