The Israeli Ministry of Energy published on November 26, 2018, a second call for bids, inviting international energy players to submit offers for the exploration of offshore soil.
This initiative follows the rather disappointing first offshore bidding round published two years ago, following which only the Greek company Energean and an Indian consortium submitted offers to explore Israeli offshore sea soil. Following the first bidding round, six exploration licenses were awarded: five to Energean and one to the Indian consortium.
In the new bid round, licenses for 19 blocks will be issued in five zones, according to the map below. Each zone comprises up to four exploration licenses. A bidder may bid for more than one of the zones, provided that the total number of licenses granted to such bidder does not exceed eight licenses (i.e. two zones).
According to the Ministry of Energy, the decision to market the blocks in zones is to allow for better correlation between the exploration areas and the subsurface geological structures that potentially contain oil and gas reservoirs. Holding larger interests will allow efficient subsurface evaluation and will increase the attractiveness of the zones to investors.
The zones are located in the southern part of Israel’s economic waters, an area previously licensed in part and which had prior seismic research and limited exploration activity. Existing research indicates the potential for the discovery of hydrocarbons in the bid round area.
The timeline for the submission of the bids is as follows:
|Publication of Initial Call for Bids||November 26, 2018|
|Data Packages Available||November 26, 2018|
|Prequalification of Operators||From March 28, 2019|
|Submission of Letters of Interest||By March 28, 2019|
|End of Q & A||By April 30, 2019|
|Publication of Final Call for Bids||May 15, 2019|
|Closing Date for Submission of Bids||June 17, 2019, 14:00 (IL time)|
|Announcement of Successful Bids||July 15, 2019|
To submit a bid, each bidder must pay a participation fee of USD 50,000 and submit a bid bond of USD 70,000.
Bidders must also meet the prequalification requirements set forth in the Petroleum Regulations (Principles of Operation of Offshore Petroleum Exploration and Production) 5777-2016:
- The bidder’s total assets in its balance sheet are at least USD 400 million; and
- The bidder’s total equity in its balance sheet is at least USD 100 million.
A bidder may prove compliance with the financial capacity criteria in reliance on its controlling shareholder.
Additional requirements are imposed on the bidder’s proposed operator with regard to financial competence and financial robustness. The proposed operator must also have at least five years’ experience in the following areas: offshore petroleum exploration, offshore drilling, offshore development and production of oil and gas fields, HSE activities, and maintenance of a safety and environmental management system for petroleum operations.