Israel is preparing to issue tenders for offshore energy exploration in another 24 defined areas of its territorial waters, after a hiatus due to regulatory uncertainty.
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The 24 are part of 60 new blocks that have been defined for energy exploration and will be tendered to local and foreign companies.
The Energy Ministry’s Petroleum Council approved the tenders on Tuesday, two months after Energy Minster Yuval Steinitz vowed to start up drilling activities for the first time in four years. The first tenders will be published in November.
The 24 blocks were chosen based on initial and promising seismographic tests. The large size of the blocks and the proven gas deposits in the eastern Mediterranean should make the tenders attractive.
Nearly 2,200 billion cubic meters of natural gas is waiting to be found in Israeli waters, more than double the amount already discovered, Energy Minister Yuval Steinitz told Reuters on Wednesday, basing his estimate on a third-party geological study.
The study also points to a potential 6.6 billion barrels of oil. “Things are now moving forward at an amazing pace,” Steinitz said, adding that while the government has yet to determine the type of tender, the blocks should available by November.
Israel began hydrocarbon exploration seven years ago, when some of the largest offshore gas fields of the decade were found off its coast. But things got off to a rough start.
Energy stocks jumped and plummeted on minor company announcements and the government, caught off guard by the windfall, began altering tax and export policies to secure a bigger share of the pot.
That put off investors and in 2012 Israel officially halted any new exploration.
But regulators have since published new guidelines, the stock market has steadied and the government has finalized its policies.
“We’ve completely solved the problems,” Steinitz said.
The blocks are up to 400 square kilometers in size in waters up to 1,800 meters deep. Some are adjacent to the recently discovered Leviathan and Tamar fields.
The government has not yet indicated what conditions it will set for companies making bids, including companies already exploring and/or operating in the sector, most importantly Delek Group and Texas-based Noble Energy.
Last January, the Energy Ministry asked the Business Concentration Reduction Committee to provide an opinion on allowing designated monopolies in other sectors of the economy to bid on exploration rights on the assumption that only big, well-financed Israeli companies stood a chance of submitting tenders.