Israel announced on Sunday that 12 licenses have been awarded to six companies, including British multinational oil and gas firm BP plc and Italian energy giant Eni, to explore and discover additional offshore natural gas fields.
Energy Minister Israel Katz said that the investment commitment by large natural gas exploration companies during this period as Israel is at war with the Hamas terror group is a sign of confidence in Israel’s resilience.
The announcement comes after Israel decided to temporarily shut down the Tamar offshore natural gas field on October 9, two days after the Hamas massacre, which saw some 2,500 terrorists burst across the border into Israel from the Gaza Strip by land, air and sea, killing some 1,400 people and seizing some 230 hostages of all ages under the cover of a deluge of thousands of rockets fired at Israeli towns and cities.
“The winning companies have committed to unprecedented investments in natural gas exploration over the coming three years, in the hope of discovering new natural gas reserves,” said Katz.
The discoveries would “strengthen Israel’s energy security, international ties, lower the cost of living and provide energy support to accelerate the transition of the economy to renewable energies,” Katz added.
The offshore tender marks the fourth bidding process for natural gas exploration in Israel’s economic waters, which the ministry said is directed to boost competition, ensure supply to the domestic market, expand state revenues, and encourage the signing of additional gas export agreements.
The winning companies in the fourth offshore bid round are divided into two consortia, which will explore in two areas adjacent to Israel’s Leviathan field, one of the world’s largest deep-water gas discoveries. One group consists of Eni, Dana Petroleum and Ratio Energies and the other group comprises BP, State Oil Company of Azerbaijan Republic (SOCAR) and NewMed Energy.
Initially, exploration licenses will be granted to the winners of the bid for a period of three years. During this period of time, the license holders will perform exploratory work on the entire license areas, as part of the work program commitments included in their bids. After drilling of at least one well and carrying out the additional work plan, it will be possible for license holders to extend the license period in the cluster by two additional years, up to maximum of seven years, as stipulated in the Petroleum Law.
Since Israel first discovered natural gas fields off its Mediterranean coast more than a decade ago, the country has emerged as a gas exporter. The natural gas operations have put the country on a path to energy independence — and have shielded it from the worst of the energy crisis sparked by the Russian war on Ukraine this year — in a region with few natural resources.
Major offshore discoveries, including the Leviathan field, which contains an estimated 22 trillion cubic feet of gas, have attracted large oil and gas explorers, such as US energy giant Chevron to partner with local companies.
Back in 2020, Israel started pumping natural gas to Egypt from the Leviathan gas field. In June of last year, Israel, Egypt and the European Union signed a memorandum of understanding that could see Israel export its natural gas to the bloc for the first time.