Energy Minister of Israel announced the launching of its second bid round to grant exploration licenses for natural gas and oil in Israel’s economic waters in the Eastern Mediterranean. The bid round will follow the earlier round which began in 2016 and granted 6 licenses, some are expected to commence drilling in the upcoming months.
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.
Israeli Energy Minister, Dr. Yuval Steinitz said.
In the new bid round, licenses for 19 blocks will be issued in five zones. The zones are located in the southern extent of Israel’s economic waters, an area which has been previously licensed in part and had previous seismic research and limited exploration activity. The existing research indicates the potential for the discovery of hydrocarbons in the bid round area.
Bids for the new round are to be submitted by June 2019 with announcement of the winners scheduled for July 2019.
Required guarantees for bid round participation call for $2.5 million for the first block licensed in a zone. Each additional block in the same zone will require another $500,000. The maximum guarantee required for four consecutive blocks will be $4 million.
Before the drilling procedure, a licensee will be required to place an additional guarantee of $5 million. An exploration license initially will be granted for 3 years. The licensee can request up to two 2-year license extensions provided they fulfill certain conditions. The extension schedule is designed to allow the licensee time to study the area and only then decide regarding continuing activity.
In addition, licenses will only be granted in areas about four miles or greater from the shoreline, according to the strategic environmental survey conducted.
The Ministry of Energy will also inform the licensees about habitats in the license areas, the potential impacts on the level of development that will be allowed, the precautions that will be needed and the restrictions regarding the preservation of these habitats.
