"The negotiations between Israel and Cyprus on a framework agreement to consolidate joint development and production activity are in full swing, and are likely to include arrangements for dividing up the joint reservoirs," Alexander Varshavsky, Director of the Natural Gas Authority and Petroleum Commissioner at the Ministry of National Infrastructure, Energy and Water Resources told the companies that are partners in the Ishai exploration license, after informing them that their license was being extended to 2016.
Gas and oil exploration partnership Israel Opportunity said in a notice to the Tel Aviv Stock Exchange this morning that the agreement between Israel and Cyprus would include the Ishai license.
Ishai is one of six offshore drilling licenses known as the Pelagic licenses, covering 2 million dunams (2,000 square kilometers) 170 kilometers west of Haifa, and bordering the Gal and Ratio Yam licenses where the Leviathan structure is situated and Noble Energy's Block 12 in Cyprus. The Aphrodite 2 drilling that the license partners carried out towards the end of 2012 showed that the Aphrodite reserve discovered in the Cypriot Block 12, containing some 5 TCF (trillion cubic feet) of natural gas, partly runs into the area of the Ishai license.
According to the Petroleum Commissioner's notice, the agreement between Israel and Cyprus will contain many clauses that apply to license holders on both sides, among other things, clauses obliging the two license holders to reach a unitization agreement, subject to the conditions and timetable set out in the framework agreement.
Israel Opportunity chairman Rony Halman welcomed the agreement being formulated, saying, "There is great potential for finding additional gas and oil reserves in the Levant Basin, and so cooperation between Israel and Cyprus will restore attention to our region and enable the two countries to exploit the possibilities of exporting the gas that has been discovered and that will be discovered in their territories, which will strengthen them both politically and economically."
Published by Globes [online], Israel business news - www.globes-online.com - on September 29, 2014
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