In early September, a high-level Israeli delegation visited London and Singapore to encourage international investment in the development of Israel’s gas fields.
Israel’s efforts to encourage international bidding
In early September, a high-level Israeli delegation visited London and Singapore to encourage international investment in the development of Israel’s gas fields. The Road Show, led by Dr. Yuval Steinitz, Israel’s Minister of National Infrastructures, Energy and Water Resources (‘MIEWR’) follows on from the Israeli Petroleum Council’s approval on August 10 of 24 blocks delineated for offshore gas exploration. These developments reflect the government’s renewed prioritization of natural gas development and its intention to support increased international investment.
The end of regulatory uncertainty
After years of regulatory uncertainty Israel appears determined to restore investor confidence and reposition itself as a destination for natural gas discovery and development by international companies. In May of this year, the Israeli government approved an amended Natural Gas Regulatory Framework after months of squabbling and litigation. Among other things, the Framework establishes the regulatory regime for export of natural gas from Israel’s offshore fields. The Framework also requires U.S.-based Noble Energy and Israel’s Delek Group, who together control both of Israel’s major confirmed blocks, the Tamar and Leviathan fields, to selldown their interests in Tamar and to dispose of the smaller Karish and Tanin fields.
The Tamar field has been online and generating fuel since 2013. The government recently approved the Plan of Development submitted for Leviathan. With the Petroleum Council’s approval of the 24 blocks in Israel’s economic zone, Israel is inviting international gas companies to participate in exploration tenders, the threshold conditions for which are due to be published by the Israeli Antitrust Authority in November. The 24 blocks being offered were chosen following independent reports commissioned by the Minister of the MIEWR detailing the potential for gas discovery based on seismic and geological data.
The below map, from the MIEWR’s website, details in green the nominated blocks that will be offered for tender.
The wider regional context
In addition to Israel, Cyprus and Egypt have also benefitted from discoveries of natural gas and have recently issued new exploration licenses for drilling on their shores. The regional players have each taken steps toward diversifying their energy sources and have increased infrastructures aimed at the exploration and exportation of natural gas. It is currently estimated that the Eastern Mediterranean basin, including the territorial waters of Cyprus, Egypt, Syria, Lebanon, the Gaza Strip and Israel, holds some 3,450 BCM of natural gas.
Our Israel Focus Group and Eastern Mediterranean gas credentials
Unique among first tier international firms, we have a dedicated Israel Focus Group with a team stationed on the ground in Tel Aviv. We have deep experience in oil and gas projects offshore Israel and in the wider region, including: financing for the development of the Tamar and Leviathan fields; acting on upstream investments including on Cyprus’s Block 12 and the contemplated selldown of the Leviathan field to Australia’s Woodside; acting for a potential purchaser of export gas from the Leviathan field; the construction of private power plants in Israel and the dispute between East Mediterranean Gas and Egypt over a subsea gas pipeline.