Natural gas from Israel's Tamar field began flowing to customers in 2013. Photo: Screenshot / Youtube.

The Palestinian Authority announced its intention to explore for oil in a 400 square kilometer area that could hold between 30 million and 186 million barrels, the Lebanon Daily Star said on Thursday, based on an Associated Press report.

Mohammad Mustafa, Palestinian Authority Deputy Prime Minister for Economic Affairs, told the AP that “the Palestinian people have the right to use their resources,” adding that oil exploration was included in a list of economic development ideas put forward by Quartet Middle East Envoy, former UK Prime Minister Tony Blair.

In a statement, Blair’s office confirmed that energy was among the eight sectors targeted in his initiative, also including agriculture, construction and tourism, the AP said. “Reliable energy supply is critical for the expansion and development of all sectors of the Palestinian economy,” his office said, but the statement did not mention the oil exploration project specifically.

The AP said the office of Israeli Prime Minister Benjamin Netanyahu had no comment on the plan, Israel’s Energy Ministry said it was not involved in the plan and Giora Eiland, acting Chief Executive of Israeli oil firm Givot Olam, declined to comment on the PA project, but said his company “absolutely” did not take any oil from land under PA rule. “We only have vertical drills, and all of them are located on the Israeli side,” Olam said.

Mustafa, a U.S.-educated economist and former official at the World Bank, said the project could generate $1 billion for the PA government, including taxes and royalties, and the PA will be accepting bids from potential partners through June.

“The existence of oil in Palestine is a highly promising opportunity for the Palestinian economy,” Mustafa told the AP.

Israel has been developing the huge Tamar and Leviathan natural gas fields in the Mediterranean, and has also begun pumping oil from a small field near the boundary with the PA ruled territory, where the PA hope to develop this oil field.