Only Two Groups Bid in Israeli Offshore Energy Tender

Interest is tepid as hopes that energy majors would join didn’t pan out

The foundation platform for the Leviathan natural gas field in the Mediterranean Sea, about 130 kilometres (81 miles) west of the coast of the Israeli city of Haifa, on January 31, 2019.

Israel’s Energy Ministry said on Monday it had received bids from two groups of companies to explore for oil and gas off its Mediterranean coast, falling short of expectations for more robust interest from major energy firms in its latest auction.

The ministry said the new activity would help position the country as a regional energy hub. But the results were not much of a rebound from a disappointing round two years earlier when, again, just two groups placed bids.

The first group in the current round was made up of British newcomers Cairn Energy, SOCO International and Israel’s Ratio Oil. The second consortium included repeat bidders Energean and Israel Opportunity. Together they offered to take 12 of the 19 available blocks.

Israel discovered in 2009 that it had large reserves of natural gas in the eastern Mediterranean, turning it into a potential energy exporter from an importer, and has been hoping to attract oil and gas majors to operate in its waters.

Energy Minister Yuval Steinitz said in March that Brazil’s Petrobras was expected to take part in the tender while Reuters reported that Exxon Mobil, in a major policy shift, was considering bidding in the auction. Neither name was on the final list.

Instead, Israel has been relying on small and mid-size companies to develop its offshore reserves. Texas-based Noble Energy is the operator of two large projects and Energean already has operations in Israel.

A date for a final decision was not given, but should the bidders be granted licences they will have three years to explore and, if conditions are met, could request up to a four-year extension.

The ministry said another bidding round was expected in 2021.