Twelve licenses approved for gas, oil exploration off Israel's coast

"This is another milestone for the discovery and development of additional natural resources in the economic waters of the State of Israel," said Energy Minister Yuval Steinitz.

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July 30, 2019 19:17
2 minute read.
Twelve licenses approved for gas, oil exploration off Israel's coast

An aerial view shows the newly arrived foundation platform of Leviathan natural gas field, in the Mediterranean Sea, off the coast of Haifa. (photo credit: MARC ISRAEL SELLEM)

The Petroleum Council, the national body tasked with advising the energy minister regarding petroleum rights, approved granting 12 new licenses – for gas and oil exploration offshore Israel – to two consortia on Tuesday.

After reviewing bids submitted to the Energy Ministry during its second offshore energy tender process, council members recommended awarding eight exploration licenses to a consortium – made up of British companies SOCO International and Cairn Energy together with Ratio Oil Exploration – and four licenses to a consortium of the British firm, Energean Oil & Gas in partnership with Israel Opportunity.

The two consortia submitted bids for 12 out of 19 offshore blocks available for exploration in Israel’s economic waters under the recent tender.

“This is another milestone for the discovery and development of additional natural resources in the economic waters of the State of Israel,” said Energy Minister Yuval Steinitz.

“I have no doubt that in the coming years, we will see further gas and oil discoveries, and the participation of additional European companies for exploration will enable the utilization of resources and increased competition to dismantle the monopoly [in the energy sector],” Steinitz continued. “The primary beneficiaries of the tax revenues and decreased air pollution in Israel are the citizens of the State of Israel.”

The current exploration process, which began in November 2018, follows the award of six exploration licenses granted to Energean and a consortium of four Indian companies in December 2017. A third tender process for exploration is expected to take place in 2021.

To complete granting the licenses, successful bidders are required to pay signature bonus and license fees, in addition to presenting the ministry with appropriate financial guarantees.

Exploration licenses will be awarded for an initial three-year period, after which, extensions may be granted on two occasions for a total of four years based on progress in exploration and drilling activities.

Seven natural gas fields have been discovered off the coast of Israel to date, including major reservoirs found at Tamar and Leviathan that are estimated by the Energy Ministry to hold a combined 750 billion cu.m. of natural gas.

Gas flow from Israel to Egypt is expected to commence in November, Steinitz told reporters last week in Cairo while attending the second meeting of the Eastern Mediterranean Gas Forum.

In February 2018, Delek Drilling and Noble Energy signed a $15b., decade-long deal to supply 64 billion cu.m. of natural gas to Egypt from the Leviathan and Tamar gas fields, with the latter already supplying natural gas to Israel since 2013.

The deal with Egypt follows a $10b. agreement in Sep. 2016 – between Jordan’s National Electric Power Company and the Leviathan project partners – to supply a gross quantity of 45 billion cu.m. of natural gas to Israel’s eastern neighbors over a 15-year period..


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