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November 5, 2018

Israel to auction 19 new offshore exploration blocks in Mediterranean

Israel is set to launch a second bid round to auction 19 new offshore exploration blocks in the eastern Mediterranean to oil and gas companies.

Israel is set to launch a second bid round to auction 19 new offshore exploration blocks in the eastern Mediterranean to oil and gas companies.

The government will unveil details pertaining to the proposed tender by the end of this month, while the winning bids will be revealed after six months, Reuters reported citing Israel Energy Ministry director-general Udi Adiri.

The latest bidding round follows last year’s exploration tender, which did not yield the desired results as only two groups of companies submitted their bids.

Despite the lukewarm response last year, Israel is confident of greater participation from oil and gas companies in the forthcoming round.

“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.”

The weak interest in the previous auction was due to last year’s prevailing energy market conditions and the weak investment climate, according to the news agency.

In the latest round, licences will be issued for blocks in five zones located in the southern extent of Israel’s economic waters. Each zone comprises multiple blocks.

Each block measures up to 400km² and each zone can be as large as 1,600km².

Israel Energy Minister Dr Yuval Steinitz said: “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.”

The government will give the exploration licences to the winning companies for an initial period of three years. Subject to certain conditions, the licences could also be extended by up to four years.

Israel reached export deals with Jordan and Egypt over the past two years, which will allow companies to sell gas produced from the Israel-based blocks to buyers in these countries.

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