Report: Exxon evaluating offshore Israel energy exploration bid

According to the report, the offshore blocks under discussion could contain up to 75 trillion cubic-feet of gas and 6.6 billion barrels of oil.

March 14, 2019 18:11
2 minute read.
An Israeli gas platform, controlled by a U.S.-Israeli energy group, is seen in the Mediterranean sea

An Israeli gas platform, controlled by a U.S.-Israeli energy group, is seen in the Mediterranean sea, some 15 miles (24 km) west of Israel's port city of Ashdod. (photo credit: REUTERS/AMIR COHEN)


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American oil and gas giant ExxonMobil is considering exploring for energy off the Israeli coast, according to Reuters.

Executives from the Texas-headquartered multinational are said to have met with Energy Minister Yuval Steinitz during his visit to Houston this week, ahead of a June auction – the second of its kind – for rights to explore and pump oil offshore.

The world’s largest publicly traded international energy company has reportedly acquired a $50,000 data package from the Energy Ministry to prepare for the auction, and representatives have visited a ministry data center located in Jerusalem.

According to the report, the offshore blocks under discussion could contain up to 75 trillion cubic-feet of gas and 6.6 billion barrels of oil.

Steinitz told Reuters this week that the bidding round will not be affected by the outcome of the April 9 elections to the Knesset.

“Israel is committed to the bid round... The gas framework was approved by the government, by parliament, by the Supreme Court and is there to stay,” he said.

Amid growing interest in possible energy reservoirs in the Eastern Mediterranean, Exxon announced last month a natural gas discovery off the shores of Cyprus, potentially containing five trillion to eight trillion cubic feet of gas.

On Thursday, Italian multinational energy company Eni announced a new gas discovery in the Nour exploration field located in the Eastern Egyptian Mediterranean.

Yet major energy companies like Exxon and rivals Royal Dutch Shell and Total, the report says, have been reluctant to invest in Israel until now due to lucrative operations in energy-rich Arab states along the Gulf Coast. Exxon is due to invest more than $20 billion over a decade to build manufacturing facilities in the region.

Until large discoveries of natural gas were made off Israel’s coastline in recent years, few perceived the historically natural resource-poor Israel to be a significant source of energy. This perception started to change with the discovery of the Noa gas field off the shores of Ashkelon in 1999.

The discovery of more major natural gas fields in Israel since 2009, including Tamar and Leviathan, has transformed the Jewish state from an energy-dependent country into an energy supplier, both domestically and abroad.

Israel is now planning to supply former adversaries Jordan and Egypt with natural gas valued at $26b. and plans to construct a 2,000-kilometer pipeline to supply Eastern Mediterranean gas to Europe. In January, seven countries hoping to benefit from the region’s newly discovered resources, including Israel, established the Cairo-based Eastern Mediterranean Gas Forum.

Speaking to The Jerusalem Post in November 2018, Steinitz said “much more natural gas is yet to be discovered in Israel’s economic waters,” and expressed his desire to invite companies from the United States and Europe to consider participating in the exploration bidding process.

“Maybe there were skeptics in the past regarding exporting gas from Israel before the signing of contracts with our neighbors and agreements for the cross-Mediterranean pipeline,” Steinitz said.

“I think it is much more attractive now to explore the rest of our economic waters and to discover additional gas fields in the eastern Mediterranean in general, and in Israel in particular.”

Several other major energy firms are also considering competing for the latest offshore exploration rights, Reuters said, with bids due to be submitted by the June 17 deadline.

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