Israel announces new Offshore Bid Round

Israel announces the launch of its Second Offshore Bidding Round (OBR 2018) to grant exploration licenses for natural gas and oil in Israel’s economic waters in the Eastern Mediterranean. OBR 2018 builds upon the growing regional importance of the East Mediterranean as a hydrocarbon province, the progress made with the development of the giant Tamar and Leviathan fields, as well as the Karish and Tanin fields in Israel’s offshore waters, and the rapidly improving options for monetizing gas produced both domestically and via export.

The Ministry of Energy proposes to offer multi-block, multi-license ‘Zones’ to provide companies with an opportunity to explore larger areas of up to 1,600 sq. Km (1000 sq mi) with a diversity of plays and potential targets for gas and oil.    The Zones are located in the southern extent of Israel’s economic waters, an area well covered by 2-D and 3-D seismic data and other data.

Research by BEICEP (supported by US Geological Survey) has shown that the yet-to-find in the Eastern Mediterranean (in Israel’s economic waters) is 75 TCF (2120 BCM) of natural gas and 6.6 billion barrels of oil. This excludes the Leviathan and Tamar discoveries by Noble Energy in 2009 and 2010, containing over 30 TCF (900 BCM).

The export opportunities from Israel have grown since the last bid round:

  • A deal with Jordan valued at $12 billion (US)
  • A deal with Egypt valued at $15 billion (US), gas to start flowing in early 2019
  • A subsea pipeline between Israel, Cyprus, Greece and Italy is in advanced stages of planning, with the support of the European Union. Gas is planned to start flowing to Western Europe in 2025.

Domestic demand in Israel is growing and will increase significantly in coming years as Israel moves to cleaner fuels for power generation and transportation.

Israeli Energy Minister, Dr. Yuval Steinitz: “It is my pleasure to announce the launch of our new bid round for exploration and production of natural gas reservoirs in the East Mediterranean. This bid is intended to continue the development of the natural gas market in Israel, increase competition by the entry of new international energy companies and broaden Israel’s energy security. These efforts correlate with the progress of the subsea pipeline between Israel and Europe, which will allow us to export the gas to Greece, Italy and the rest of Europe in addition to supplying markets in our neighbors Egypt and Jordan.”

To support its oil and gas sector, Israel has opened an Energy Mission in Houston, Texas.  The Houston office creates a closer dialogue with the international E&P companies in order to generate interest and increase participation in the bid round.

The bid round details will be published in the upcoming weeks. Submission by June 2019 and Announcement of the bid winners will take place in July 2019. Companies who are interested in participating in the bid round and submitting proposals will be requested to enroll in the bid process and purchase a data package to include geological and geophysical data from drilling and 2D and 3D seismic surveys.