Border discrepancy delays Gal development

The promising Gal offshore prospect extends into Egypt's exclusive economic zone and future development depends on cooperation.

Sources inform ''Globes'' that development of the Gal offshore exploration permit, considered one of Israel's most promising deepwater prospects, has been delayed because it extends from Israel's exclusive economic zone (EEZ) into Egypt's EEZ. The sources said that the borders of the two licenses that make up the Gal prospect, Neta and Roy, were set to ensure that they do not go beyond the borders of Israel's EEZ, but they confirmed that future development of the main prospect would depend on a cooperation between Israel and Egypt.

The issue emerged following the signing of the delimitation agreement marking the border between Israel and Cyprus's EEZ, signed in December 2010. An examination by the Ministry of Foreign Affairs, the Ministry of Energy and Water Resources, and the Survey of Israel, carried out before the Israeli-Cypriot agreement was signed, found a discrepancy between the Israeli-Cypriot maritime border and the Egyptian-Cypriot maritime border, which was agreed upon in their delimitation agreement of 2006. Israel and Egypt do not have a delimitation agreement to market their maritime border.

Under the Egyptian-Cypriot agreement, more than half of the area of the Gal prospect is located inside Egypt's EEZ. It is not clear which Israeli government agency is responsible for the embarrassing and serious cartographical error in delineating the borders of Israel's EEZ and offshore licenses.

A promising 3D seismic survey

A search permit is the provisional right to map an area which may be suitable for drilling an exploratory well for oil and gas. After mapping, the permit holder applies for a license to drill in the area of the prospect (the geologic structures) which may have oil and gas deposits.

On September 16, 2010, Ratio Oil Exploration (1992) LP (TASE:RATI.L) received the full rights to the Gal permit, which covers 1,770 square kilometers at the southwest corner of Israel's EEZ. Ratio carried out a 3D seismic survey of the prospect, which indicated promising findings, which have never been published.

Sources inform ''Globes'' that the center of the seismic survey is a large structure (prospect), which may has substantial quantities of oil and gas. The prospect is located along the geographical line which includes the Tamar and Leviathan discoveries, and geologists believe that this fact offers a strong chance of a gas discovery at Gal.

In an interview with "Globes", Ratio CEO Yigal Landau, "If Leviathan was a call option on Tamar, then Gal is a call option on Leviathan."

Ratio's Gal permit expired on August 15, 2011. The day before, the company asked the Petroleum Supervisor for two exploration licenses - Neta and Roy - for area of the permit, indicating the discovery of structures in the permit area. Ratio also asked the Petroleum Supervisor to decide who would be its partner in the licenses, and offered two options: granting 40% of the rights to ATP Oil & Gas Corporation (Bulletin Board: ATPAQ) (which is now under US bankruptcy protection); or 40% to a consortium of Modiin Energy LP (TASE:MDIN.L) (20%), EZ Energy Ltd. (TASE:EZ) (5%), and well operator GeoGlobal Resources Inc. (AMEX: GGR) of Canada(5%).

The Petroleum Supervisor has not yet announced any decision about the Neta and Roy licenses, since the application was filed over a year ago. Sources say that, during this time, a thorough review was conducted, which found that the borders of the two licenses did not go over Israel's EEZ border. So far as is known, this review was not coordinated with Egypt, but the borders obtained de facto Egyptian approval, as it published tenders for exploration licenses in areas bordering Israel's EEZ. The area of these licenses conform with the borders of the Neta and Roy licenses, suggesting an indirect solution to the diplomatic problem. Energy market sources believe that the Neta and Roy licenses will be released by the end of the year. The Egyptians probably do not accept the borders of the Gal permit, which extends into Egypt's EEZ, and Egyptian approval of the prospect is requirement for its exploration and development.

The Ministry of Energy said in response, "There are no instructions to freeze the handling of Gal. There is no disagreement with Egypt about the EEZ."

Published by Globes [online], Israel business news - www.globes-online.com - on October 23, 2012

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

Emiliano Calemzuk  credit: PR CEO and "investor group" buying out Reshet 13

CEO Emiliano Calemzuk and the other investors will hold 74% of the television channel, while Len Blavatnik’s Access Industries and WBD will remain with 26%.

Inflation  credit: Tali Bogdanovsky Unexpectedly low February CPI reading cuts inflation

While inflation in Israel in the 12 months to the end of February 2025 is lower than forecast, housing prices continue to rise.

Yitzhak Tshuva credit: Gidon Levy and Tali Bogdanovsky Competition Authority allows Delek takeover of Isracard

The Competition Authority is considered the easier of the two regulatory hurdles that the deal must overcome, the other being the Supervisor of Banks.

David Amsalem  credit  Noam Moskowitz, Knesset Spokesperson's Office Rafael to pay state NIS 444m dividend

The minister in charge of the Government Companies Authority, David Amsalem, has approved the payment by the defense company.

Barak MX air defense system  credit: IAI IAI profit jumps 55%

Israel Aerospace Industries posted a net profit of $493 million for 2024, and ended the year with an all-time high orders backlog of $25 billion.

A TSG system in tactical use  credit: PR TSG signs cooperation agreement with US defense co

The agreement includes the integration of TSG's advanced technologies into sensor-based defense systems, which will be integrated into the operational systems of US defense units.

Bria CEO Yair Adato credit: Kseniia Poliak Israeli visual generative AI co Bria raises $40m

Bria’s Visual Generative AI platform empowers businesses to create predictable, controllable, and on-brand content that aligns with their visual language.

Amnon Shashua and Aviram Ziv credit: Eyal Izhar OrCam stymied by investor dispute with Shashua

Demands by institutional investors are blocking the visual and hearing impairment device developer's recovery plan.

Work on the Green Line credit: Bar Lavi Egged wins tender to operate TA light rail Purple, Green Lines

NTA awarded the tender to Egged, which already operates the Red Line, despite government ministry opposition to one operator for the entire network.

Gabi Seroussi illustration: Gil Gibli Board chooses Seroussi as IAI chair as Erdan freezes candidacy

Israel Aerospace Industries board chose Gabi Seroussi as chair even though he did not to go through the preliminary process of the Government Companies Authority appointments review committee.

Bavli Park penthouse credit: Eyal Tagar Tel Aviv Park Bavli penthouse sells for NIS 43m

A 44th floor penthouse in one of the two towers in businessman Yitzhak Tshuva's Park Bavli project has been bought by an Israeli businessperson.

El Al aircraft  credit: Yoav Yaari El Al pilots receive nearly NIS 250,000 bonus each

Thanks to the agreements signed with the unions in 2018, El Al's employees as well as senior management share in last year's success.

Pentera CEO Amitai Ratzon credit: Eyal Izhar Israeli security validation co Pentera raises $60m

Pentera's platform enables security teams to analyze complete attack paths, identify root causes, and prioritize remediation for effective risk reduction.

Tel Aviv credit: Shutterstock Supply of unsold new homes hits record

Israel's real estate market is sliding into recession with 78,000 unsold new apartments in January, the Central Bureau of Statistics reports.

D&B chairman Doron Cohen and Meitar partner Dan Geva Meitar reclaims title of Israel's biggest law firm

Meitar has first place with 537 lawyers, followed by Herzog Fox Neeman with 512 lawyers, according to the latest Dun's 100 rankings.

First International Bank of Israel CEO Eli Cohen  credit: Eyal Toueg First Int'l posts top return on equity

First International Bank of Israel's return on equity in 2024 was 19%, the highest among Israel's banks.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018