The likelihood of Israeli companies winning gas exploration licenses in Cypriot waters has improved after a range of large international companies decided not to bid for block tenders. In February, the Cypriot government published tenders for 12 blocks of offshore licenses.

Sources inform "Globes" that a range of international companies, including Russian, Chinese and French companies, have decided not to compete in the bid following diplomatic pressure from Turkey. The attractiveness of the blocks has also suffered from the relatively disappointing results from the Block 12 drilling - the only license so far issued - where lower than expected quantities of gas were found.

The fact that some large companies are staying away improves the chances of Israeli companies that are planning to bid. Israeli companies enjoy an advantage because the areas being searched are close to the Levantine basin where the Israeli licenses are located. Consequently, they already have information about the geological layers to be drilled.

Sources inform "Globes" that one of the leading Israeli bidders is Ofer Nimrodi, controlling shareholder in Israel Land Development Energy Company, which holds a stake in the Myra and Sarah licenses. Nimrodi recently met with senior figures in the Cypriot government, although as far as is known Nimrodi is yet to bring an international drilling operator on board. Other Israeli companies whose names have yet to be published include Dor Alon Energy, which holds 4% of the Tamar license, and Epsilon Sigma, a partner in the Dalia Energy private power station. Other groups likely to bid are Isramco, Modiin Energy, and ATP Oil & Gas Corporation, which may try to form a consortium with Israel Electric Corporation. Delek Group, which holds 30% of the Cypriot Block 12 license has yet to decide whether to bid.

Russia is particularly concerned with antagonizing Turkey, fearing that Ankara will promote the Naboco project to bring gas from central Asia to Europe and compete with Russian gas. Turkey is also an important market itself for Gazprom, buying some 30 billion cubic meters of gas per year from the Russian national company. The Chinese government has also ordered companies not to take part in tenders.

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