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Israel sees just two groups bid in delayed gas licensing round

London — Two groups submitted bids for blocks in Israel's delayed offshore licensing round by the Monday deadline, the Israeli energy ministry said, with no majors bidding.

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Israel had extended by a month to mid-July the deadline for bids in only its second international gas licensing round to give interested parties more time to prepare.

The round offered licenses for 19 blocks within five zones as Israel looks to move forward with upstream developments to help feed an offshore gas pipeline to southern Europe.

But only two groups submitted bids for a total of 12 blocks out of the 19 on offer.

The groups were:

**a consortium of UK-listed Cairn Energy and Soco International, together with Israel's Ratio Oil Exploration;

**a consortium of UK-listed Energean Oil & Gas and Israel Opportunity.

The round was launched in November last year by energy minister Yuval Steinitz who said he hoped to attract new international energy companies to the country's already proven offshore.

Despite the limited interest, Steinitz said the entry of new players would help end the "monopoly" status of Israel's offshore and "increase competition in this field." "We are welcoming three new international groups that will explore and develop Israel's gas and oil resources," he said in a statement.

The ministry said it would hold another round in 2021.

"We continue to act to transform Israel into a regional energy power," Steinitz said.

Story update: Lukewarm interest to Israel's offshore tender highlights East Med uncertainty


Steinitz said the bids received would increase the number of licenses for exploration in the Israeli offshore from six to 18.

The second Israeli round followed a first round that began in 2016, which granted six new licenses, including to Energean.

Energean in April announced a "significant" gas discovery in a block that was awarded in the first round.

The Karish North well encountered a gross hydrocarbon column of up to 249 meters, with initial estimates suggesting gas in place of 1-1.5 Tcf (28-42 Bcm).

It was the first new gas find in Israeli waters after years of inactivity in the country's East Mediterranean blocks.

Israel's offshore is already home to the major Tamar and Leviathan gas fields -- discovered in 2009 and 2010, respectively.

Both fields are operated by US-based Noble Energy, and the latest licensing round was designed to attract new players as any company holding over 20% of an existing production license was not able to take part.

Each of the 19 blocks measure up to 400 sq km and each zone, consisting of multiple blocks, is as large as 1,600 sq km.

The zones are located in the southern extent of Israel's economic waters, an area which has been previously licensed in part and had previous seismic research and limited exploration activity.


The second round was intended to continue the development of the gas market in Israel while at the same time providing gas for the planned subsea pipeline between Israel and Europe -- the EastMed pipeline -- under development by Italy's Edison and Greece's DEPA.

The 10 Bcm/year, 1,300 km pipeline would stretch from gas fields offshore Israel and Cyprus via Crete to Greece from where it could link in to the planned Poseidon pipeline to Italy.

Israel and Cyprus's existing finds in the region -- Tamar, Leviathan, Aphrodite and several other fields -- are expected to serve the Israeli domestic market and the Egyptian market.

Any new major gas discoveries offshore Israel would therefore be ideal as feedgas for the EastMed pipeline.

-- Stuart Elliott,

-- Edited by James Leech,