Eastern Mediterranean EEZ

Eastern Mediterranean gas explorations entered a new round of uncertainty

  • Israeli regulator opposes Noble, Delek’s control of Leviathan gas field

Reuters (Tuesday 23rd) reported beginning this week that Israel’s competition regulator recommended on Tuesday breaking up what it says is a monopoly control of the country’s offshore gas reserves by Noble Energy and Delek Group, who together hold 85 percent of the giant Leviathan field.

The decision puts in doubt current development plans for Leviathan, the huge deepwater gas field discovered four years ago off the Israeli coast, hitting the share prices of all the local partners in Leviathan.

Noble owns 39.66 percent of Leviathan. Delek Drilling and Avner Oil Exploration, both units of Delek Group, hold 22.67 percent each and Ratio Oil Exploration owns 15 percent.

Following heavy political pressure, Commissioner David Gilo has revoked a compromise deal that would have allowed Texas-based Noble Energy and Israel’s Delek Group to keep control of Leviathan.

Anti-trust authorities have been targeting the companies, which discovered the field and other, smaller fields nearby, after critics, mostly political opponents of Prime Minister Benjamin Netanyahu, said that the firms have too much control over such a valuable national asset.

Leviathan is one of the world’s largest offshore gas finds to be made in the last decade, with an estimated 22 trillion cubic feet (622 billion cubic metres) of reserves. Production had been expected to begin in 2018 following an initial investment in the development of around $6.5 billion.

Noble and Delek also own controlling stakes in the nearby Tamar field, which was discovered in 2009 and started producing nearly two years ago from reserves estimated at some 10 tcf (280 bcm).

The duo previously bought into the exploration block licences that resulted in the discovery of Leviathan without the competition regulator’s permission but Gilo had previously allowed the purchase on condition that the two sold stakes in two of their other smaller discoveries in the same East Mediterranean area, Karish and Tanin, which have combined reserves of 3 tcf.

However, Gilo told Noble and Delek executives at a Monday evening meeting that he had now decided their licence ownerships constituted a cartel and on Tuesday recommended a break-up of the control of the country’s key gas reserves.

“The entry of Delek and Noble into Leviathan created a situation in which these groups control all of the gas reserves on the State of Israel’s coast,” the regulator said in a statement.

Shares in Delek Drilling were down 10 percent by 1315 GMT at 14.80 shekels while Avner was down 9 percent at 2.68 shekels and Ratio was down 10 percent at 0.33 shekel. Delek Group was down 13 percent at 952 shekels.

“It sends a very bad message for investors in Israel,” said Noam Pincu, an analyst at the Psagot brokerage, adding it also may delay Leviathan’s development significantly.

“Instead of creating competition, it will delay competition,” he said.

Liberal politicians who opinion polls suggest could stymie Netanyahu’s bid for a fourth term, accuse his government of permitting tycoons an unfair monopoly over Israel’s greatest natural resource.

The Israeli authority plans a hearing with the companies before making a final decision and analysts believe a settlement will ultimately be reached, although Noble and Delek could be forced to sell their interests in Tamar or Leviathan.

Pincu said one possible outcome could be that Noble and Delek are allowed to hold onto a share of Leviathan’s gas earmarked for export but not the 60 percent that is destined for Israel’s own use.

Noble said it would take all necessary action to protect its legal and legitimate rights.

Binyamin Zommer, Noble’s manager in Israel, said the authority’s decision :

“Will cast a shadow over the future of the oil and gas industry in Israel and will impact Noble Energy’s continued investment there.”

Zommer said Noble, which along with its partners has invested $6 billion in Israel’s oil and gas sector, remained committed to developing Leviathan, as soon as regulatory, commercial and financial conditions allow.

He also said Noble bought the Leviathan licence with Israeli government approval.

Leviathan partners are in talks with Britain’s BG Group , which wants to run a subsea pipeline from Leviathan to its 10 bcm a year liquefied natural gas export plant on Egypt’s Mediterranean coast, and with Jordan’s national electricity company.

Only the Palestinian Authority has so far committed to buying gas, agreeing a 20-year deal worth $1.2 billion.

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  • Jordanian MP: Buying Gas from Israel Like Dealing with Satan 

Source; israelnationalnews.com

A Jordanian parliamentarian is so much against her country’s gas deal with Israel, that she would rather set herself on fire than see the deal being implemented.

The MP, Hind Al-Fayez, said in a television interview that a Jordanian-Israeli gas deal was tantamount to having “dealings with Satan.”

“I will use firewood or even set myself on fire, but I will never import Israeli gas,” she declared. The interview aired on the Jordanian/U.K. ANBchannel on December 14 and was translated by the Middle East Media Research Institute (MEMRI).

U.S. giant Noble Energy announced in September that Israel would supply Jordan with 1.6 trillion cubic feet of natural gas from its Leviathan offshore field over a period of 15 years.

A week after the deal was announced 40 Jordanian parliamentarians submitted a memorandum the deal not go through.

Jordan’s main opposition Islamist party threatened this week to take legal action against anyone in the kingdom who signs the controversial gas deal with Israel.

Though Jordan has a peace treaty with Israel, the country’s parliament, which is made up mostly of Islamists, remains anti-Israel and its members have more than once called to annul the peace treaty.

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  • Israel purchases four new Sa’ar 5 missile boats from Germany to defend Israeli natural gas exploration rights

Source: thetimesofisrael.com

Israel has purchased four new Sa’ar 5 missile boats from Germany, Prime Minister Benjamin Netanyahu said on Thursday.

“I am happy to tell you that a few days ago we purchased four new Sa’ar boats from Germany, on top of the submarines that are already being built there for the Israeli Navy,” Netanyahu said, speaking at a graduation ceremony for the Israeli Air Force’s newest pilots.

The missile boats will be used to defend Israel’s natural gas fields in the Mediterranean and to conduct military operations.

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  • Barbaros leaves Cypriot EEZ waters & Insufficient gas in the block 10 of Cyprus’ EEZ

Source: incyprus.philenews.com & financialmirror.com

The Energy Ministry of Cyprus has said last week that the SAIPEM 10000 rig belonging to the ENI-Kogas venture drilled to a depth of 5,800 meters at the Onasagoras prospect without success but that new drilling will begin elsewhere within the offshore Block 9 where the consortium has identified six potential gasfields.
Anastasiades cited several examples where initial drills did not produce significant resources and referred to a large gas field off the coast of Norway where substantial gas reserves were only discovered on the fourth attempt.

So far, Cyprus’ proven natural gas reserves offshore have been limited to a field in Block 12, where US-based Noble Energy has discovered between 3.6 trln and 6 trln cubic feet of gas – not enough for a land-based liquefaction facility.
However, Anastasiades said that the government’s decision for the construction of a liquefied natural gas (LNG) terminal is still on the table, but stressed that this decision is subject to certain conditions. He said that when the government took its initial decision it took into consideration information about a great amount of hydrocarbon reserves, which made this investment a viable one.

However, recent talks with Egypt and Israel could pave the way for natural gas to be piped straight to either country, either for liquefaction and local consumption or for export, possibly to western Europe that has seen significant supplies from Russia diverted to other markets over the crisis in Ukraine and European Union sanctions on Moscow.

The other important news is that Barbaros, the Turkish vessel which carried out exploration activities for hydrocarbons in Cyprus’ EEZ since 20 October, sales off Eastern Mediterranean on the 30 December, Turkish media reported.

According to reports, Turkish Cypriot negotiator Ergun Olgun, confirmed the reports and said that it was about time to resume solution negotiations. He also called upon the Greek Cypriot side to return to the negotiating table without preconditions

Mr Olgun argued that the Greek Cypriots do not want to share the island resources and pointed out that bringing hydrocarbons on the table could be a catalyst in solving the Cyprus problem. A new round of negotiations will resume next year.

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  • Talks underway between Egypt and Cyprus to import gas through marine pipeline from Cyprus’EEZ to Egypt LNG plants.

Source: Daily news Egypt

Sherif Ismail, Minister of Petroleum and Mineral Resources, revealed beginning December that talks are currently underway with Cyprus to import gas via a marine pipeline to “energy hungry” Egypt.

In a press statement, Ismail said that a delegation from the Egyptian Natural Gas Holding Company (EGAS) was sent to Cyprus to conduct technical discussions on the subject.

Ismail explained that gas would be imported from Cyprus to meet the growing needs of the domestic market and achieve economic returns for the state.

Ismail, who met with Cyprus’s Energy Minister Yiorgos Lakkotrypis last month, stated that Egypt has significant infrastructure for natural gas, which is able to receive production from Cyprus.

The two ministers stressed in an earlier joint statement that they “agreed to speed up talks on Cypriot  natural gas exports to Egypt”. The statement added that re-exporting the gas from Egypt was an option under consideration.

In 2011, US gas and power company Noble discovered gas in the Aphrodite field in the south eastern area of Cyprus.According to estimates, reserves in the Aphrodite field range between 100-700bn cubic metres of gas.

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