Israeli cos lose out on Cypriot licenses

No Israeli energy company has won its bid in the Cypriot tenders for offshore gas and oil exploration licenses.

No Israeli company won a license in the Cypriot tenders for offshore exploration licenses. Fifteen bids from five companies and ten from joint ventures were submitted in the second licensing round.

Four consortia won the tenders: Italy's ENI SpA (BIT: ENI; NYSE: E) and South Korea's Korea Gas Corporation (Kogas) (KSX: 36460) won the licenses for blocks 2 and 3; a consortium of France's Total E&P Activities Petrolieres SA, Switzerland's Novatec Overseas Exploration & Production GMbH, and Gazprom subsidiary GPB Global Resources BV won the license for Block 9; and Total E&P Activities Petrolieres won the license for Block 11. The contiguous blocks lie north and northeast of Block 12, where Noble Energy Inc. (NYSE: NBL) and Delek Group Ltd. (TASE: DLEKG) have a license.

Delek, controlled by Yitzhak Tshuva, jointly bid in a tender for a block with Australia's Woodside Petroleum Ltd. (ASX: WPL), and Italy's Edison SpA and Enel SpA (BIT: EMEL). Other Israeli companies in the tenders were Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), Modiin Energy LP (TASE:MDIN.L), Israel Opportunity Energy Resources LP (TASE: ISOP.L) sister company Cyprus Opportunity, Israel Land Development Company Energy Ltd. (TASE: IE), and a consortium of Alon Natural Gas Exploration Ltd. (TASE: ALGS) and Sigma Exploration Ltd.

Clal Finance analyst Yaron Zar told "Globes", "There is no doubt that international companies have put the region on the map, and the government should pay attention, and expedite the regulatory handling of the industry and promote the entry of a foreign partner into Leviathan."

Zar added, "I spoke with a Woodside executive before the news from Cyprus. He told me that Woodside was very interested in becoming a partner in Israel, irrespective of the results of the Cypriot tenders."

Block 12 partner Noble Energy and Delek are also partners in Leviathan, together with Ratio Oil Exploration (1992) LP (TASE:RATI.L).

Another analyst told "Globes", "The race for Leviathan is heating up. Gazprom's win in the tender for Block 9 could cause it to want greater regional cooperation between Israel, Cyprus, and Turkey. Woodside's loss could increase its wish to become a partner in Leviathan in order to benefit from natural gas in the Mediterranean's Levant Basin. Either way, we will probably see a handsome premium on Leviathan's current valuation."

Published by Globes [online], Israel business news - - on October 31, 2012

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

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