BP (BP.L) and Azeri national oil company Socar have taken part for the first time in an Israeli licencing round for natural gas exploration, the latest sign of growing international interest in the Eastern Mediterranean basin, sources said.
BP and Socar jointly placed a bid along with Israel’s NewMed Energy (NWMDp.TA) for two offshore blocks in the fourth licencing round that closed on Sunday, according to four company and industry sources.
It comes four months after BP and Abu Dhabi’s state oil giant Adnoc offered to jointly acquire 50% of NewMed for around $2 billion, potentially giving them an entry to Israel’s growing energy sector.
The gas-rich offshore basin straddling Egypt, Israel, Cyprus and Lebanon has drawn some of the world’s top energy companies in recent years, particularly as Europe scrambles to secure supplies to replace Russian gas in the wake of Moscow’s invasion of Ukraine.
NewMed is the largest stakeholder in the giant Leviathan offshore field operated by Chevron (CVX.N), which produces 12 billion cubic metres (bcm) of gas that are supplied to Israel, Egypt and Jordan.
The joint bid placed by NewMed, BP and Socar was for blocks in proximity to the Leviathan and Tamar fields, the sources said.
BP declined to comment, while Socar did not respond to a request for comment. In a regulatory filing, NewMed confirmed it had placed a bid as part of a consortium with “international companies”.
Israel’s Energy Ministry declined to comment on specific names. On Sunday it said in a statement that four consortiums comprising nine different companies had placed six bids in the auction. Of the nine companies, five do not currently operate in the basin.
The auction’s winners are set to be announced in the fourth quarter.
Exploration for oil and gas resources is a high-risk, high-reward business that includes seismic surveys and drilling of wells, a process that can take several years.
Although there is low expectation of discovering new huge reserves similar to Leviathan or Tamar, discovering smaller resources would be vital for expanding the size and longevity of existing fields, the sources said.
Other companies also placed bids in the licencing rounds.
Energean (ENOG.L), which operates the offshore Karish field in Israel, bid for blocks in Zone I, according to the sources. Energean declined to comment.
Ratio Energies (RATIp.TA), which holds a 15% stake in the Leviathan field, also placed a bid for blocks in Zone G, according to the sources.
Ratio confirmed it had placed a bid as part of a consortium in a regulatory filing. A spokesperson for Ratio declined to comment on the details.
By Ron Bousso
