Israel has launched its previously announced bid round to grant offshore exploration licenses for natural gas and oil in the Eastern Mediterranean (OGJ Online, June 18, 2018). The round follows an earlier one that began 2 years ago and granted six licenses.
Bids for the new round are to be submitted by June 2019 with announcement of the winners scheduled for July 2019. Details are posted on the Energy Ministry web site.
Yuval Steinitz, Israeli energy minister, said, “This bid is intended to continue the development of the natural gas market in Israel, increase competition by the entry of new international energy companies, and broaden Israel’s energy security.”
Licenses for 19 blocks will be issued in five zones. Each block measures up to 400 sq km and each zone, consisting of multiple blocks, can be as large as 1,600 sq km.
The zones are in the Israel’s southern waters, which is an area already partially licensed and where there has been some seismic research and limited exploration activity.
The Israeli Energy Ministry is limiting to eight the number of licenses granted to any one party. In addition, any licensee holding more than 20% of a producing oil lease will not be able to participate in the current bid round.
Required guarantees for bid round participation call for $2.5 million for the first block licensed in a zone. Each additional block in the same zone will require another $500,000. The maximum guarantee required for four consecutive blocks will be $4 million.
Before drilling, a licensee will be required to place an additional guarantee of $5 million. An exploration license initially will be granted for 3 years. The licensee can request up to two 2-year license extensions provided they fulfill certain conditions. Officials said they designed the extension schedule to give a licensee time to study the area.
Contact Paula Dittrick at [email protected].
