Two Israeli energy firms intent upon exploring new underwater natural gas
prospects west of Hadera signed a joint operating agreement with an Italian
partner on Thursday – signifying the official entrance of a second major
international gas developer into Israel’s Mediterranean waters.
stakeholder in the two fields, called Neta and Royee, is Israel’s Ratio Oil
Exploration, which owns a 70-percent share of the project.
Opportunity Energy Resources holds a 10% share, while 20% will be in the hands
of Edison International Spa, a Milan-based subsidiary of the Electricite de
France (EDF) Group. Neta and Royee are located within the Gal gas reservoir
block, about 150 kilometers west of Hadera, and southwest of the Tamar and
“We are very proud that such an internationally
reputable company with knowhow and experience came to work with us and to be the
operator,” Ratio CEO Yigal Landau told The Jerusalem Post on Sunday.
the official “operator” of the exploration process, Edison will thereby be able
to determine the number of employees as well as their work hours and
compensation, according to an announcement about the agreement released to the
Tel Aviv Stock Exchange (TASE) on Sunday.
As per the provisions of the
agreement, the operator is not entitled to resign from its position during the
first 12 months following the agreement signing date. Afterward, the operator
can resign at any time, after providing six months of advanced notice, the TASE
The Petroleum Commission of the Energy and Water Ministry
granted the cohort exploration licenses for exploring the Neta and Royee fields
on April 15.
The large Italian energy firm holds 58 concessions and
permits in Italy and 37 licenses abroad.
Aside from a short list of small
international developers, the only major global gas explorer to enter Israel
thus far has been Houston-based Noble Energy, which holds 36% of the already
flowing Tamar reservoir and has 39.66% of the Leviathan field, which is double
the size of Tamar. Ratio possesses 15% of Leviathan. Although Australian giant
Woodside Petroleum has signed a conditional agreement to take on a 30% chunk of
the Leviathan field, the deal has yet to be finalized, due to the government’s
failure to formulate an official export policy.
While many seismic
reports have been conducted on the Neta and Royee fields, strict security
measures prohibit Ratio and its partners from revealing estimations as to how
much gas the reservoirs might contain, Landau explained.
entrance of the Italian firm, however, he stressed, “They believe what they
Miki Korner, the founder and CEO of the M. Korner oil and energy
consultancy group, told the Post that he sees the Edison entrance into the
Israeli gas market as “very, very good.”
“It’s the second important
company that is drilling,” said Korner, who was the chief economist and engineer
at Israel’s Natural Gas Authority and advised the Zemach Committee on its export
Although Edison International Spa may be the
second major international company to explore Israel’s gas potential, a few
small firms are active in the region. The partnership drilling for gas in the
Sara and Myra reservoirs – which were later deemed to be dry – included Canadian
operator GeoGlobal Resources. Meanwhile, the cohort exploring Yam-3 has a small
Azerbaijani operator called Caspian Drilling. In a string of reservoirs just
west of Leviathan, a small Norwegian firm called AGR is acting as the operator
for the exploration team.
These “small” and “nameless” companies pale in
comparison to Noble Energy, “which is more or less everything,” according to
“And Edison is in the same league,” he said. “It’s very, very
good for the market. I think it’s very, very good that Noble will not be the
Regarding Neta and Royee, while companies involved cannot
legally provide estimates as to how much gas might be buried there, Korner also
stressed that there is still no way to really know how much is present
For example, he explained, the first declaration of a gas
estimate for the Tamar reservoir was only 88 billion cubic meters, while today
the finds have been confirmed to stand at 282 billion cubic meters.
large professional has come and said that we think there’s gas.
be an incident that there’s no or little gas there, but I believe there’s a lot
of gas there,” Korner said, noting that to him, “a lot” means between around 85
and 115 billion cubic meters.
“But this is a belief, not a professional
estimation,” he stressed.
It is indicative, however, that the “very
respectable and serious company” Edison International Spa has elected to explore
in Israel, according to Korner.
“They think the potential for gas in a
substantial amount is there and therefore they invested money to come to
Israel,” he said.
Nevertheless, Korner said that he does not think that
Edison’s decision will necessarily prompt other sizable international
hydrocarbon firms to enter the market, as representatives from several companies
have told him that they do not see the Israeli government as a
In addition to lacking a stable export policy, the government
poses problems with regard to allowing ship docking on shore, approving foreign
professionals to work in the country, establishing facilities and getting past
many other regulations, Korner explained.
Although no first-tier energy
companies would come to Israel at all due to their involvement in the Arab
world, there are at least 20 second- and third-tier companies, such as Noble
Energy, that could be potential partners for Israel, if not for the bureaucratic
obstacles, he added.
That being said, Korner still said he had hopes as
Edison entered the sector.
“Let’s hope they will find something so they
will need to stay, and we will have at least two serious companies,” he said.