Court awards Energean full Karish North rights worth $3.4b

Energean's FPSO Karish rig credit: Energean
Energean's FPSO Karish rig credit: Energean

The three justice Israel Supreme Court panel dismissed Chevron and Delek unit NewMed Energy's petition for a share in the offshore gas field.

Israel's Supreme Court has ruled that the full economic rights following the North Karish offshore discovery belong to Energean plc (LSE: ENOG; TASE: ENOG). Justices Ofer Grosskopf, Yitzhak Amit and Ruth Ronen dismissed Chevron and Delek Group unit NewMed Energy's (TASE: NWMD) (formerly Delek Drilling) claim to some of the economic rights in North Karish, even though part of the field is located in the area of the Alon D license that they held when the discovery was made.

The court was required for the first time to address the question of ownership of rights in such a case, and determined that a company that holds a license to search for gas in a certain area but does not actively search for it, will not enjoy the rights as a result of a search performed by another company.

The ruling was based on three facts. Firstly Chevron and NewMed Energy, wrote Grosskopf, did not make any significant investment in the Alon D license (400,000 dunams) adjoining North Karish) and even avoided undertaking the geological survey that they were committed to.

Secondly Grosskopf notes that the discovery came close to expiry of the Alon D license and thirdly that the area in the license in which gas was found was small.

Dismissal of the petition comes with relatively heavy legal costs. Chevron and NewMed Energy must pay NIS 60,000 to the state and NIS 40,000 to Energean.

Potential production of billions of dollars

In 2020 Energean announced the Karish North discovery, adjacent to its Karish field. Development of the field in which there is an estimated 32 billion cubic meters (BCM) of natural gas, worth about $3.4 billion, is in advanced stages.

Published by Globes, Israel business news - - on November 29, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Energean's FPSO Karish rig credit: Energean
Energean's FPSO Karish rig credit: Energean
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