Israeli cos likely to bid in new Cypriot gas tenders

The Cypriot government has published tenders for 12 offshore blocks.

Israeli companies will likely participate in the new Cypriot gas tenders. The Cypriot government has published tenders for 12 offshore blocks in its exclusive economic zone.

Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, already owns 30% of the rights to the Block 12 concession, which it acquired by Noble Energy Inc. (NYSE: NBL) last year. The Block 12 discovery totals seven trillion cubic feet of natural gas.

Israeli companies mentioned as possibly interested in the Cypriot tenders include Delek, Shemen Oil and Gas Resources Ltd. (TASE: SMOG), Ratio Oil Exploration (1992) LP (TASE:RATI.L), Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Alon Natural Gas Exploration Ltd. (TASE: ALGS).

On Saturday, the Cypriot government published requests for bids in the second round of tenders for offshore gas and oil exploration concessions in the official journal of the European Union and on the Cypriot government gazette and Ministry of Commerce website. The applicants have 90 days to search for mineral deposits inside the island's 51,000-square kilometer EEZ. The Cypriot government is offering concessions to Blocks 1 to 11, and Block 13, located to the south of the island. Block 12 is close to Israel's Leviathan and Tamar discoveries.

When Cyprus published its first tender for offshore gas exploration in 2007, Noble Energy was the only company to bid. Cypriot officials are now confident that the new tenders will draw far greater attention following natural gas discoveries in the Levant Basin.

In September, Cypriot Energy Service director Solon Kassinis told "Globes" that natural gas reserves in Cyprus's EEZ could total 100 trillion cubic feet and that there might also be hundreds of millions of barrels of oil.

The new notice is for the "granting and using authorizations for the prospection, exploration and production of hydrocarbons." Solon told "Cyprus Mail" that exploration licenses would be initially awarded to successful bidders. "If a bidder makes a discovery, they would be granted a subsequent license for exploitation."

The "Cyprus Mail" added that Cyprus's ministries of foreign affairs and commerce were in the final stages of negotiating a unitization agreement with Israel. This would arrange gas prospects into discrete units, given that some of the Cypriot prospects in the eastern Mediterranean border and/or overlap Israeli ones.

Israeli companies have an edge, as they already possess geological information about the Levant Basin, which includes Israeli and Cypriot waters in the Eastern Mediterranean. On the other hand, big oil companies have the advantages of size and wherewithal, as well as political ties with the Cypriot government. Russia's Gazprom has already announced that it will participate in the tenders.

Published by Globes [online], Israel business news - - on February 14, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018