Israeli group in partnership to explore for oil, gas off Cyprus shore

Article Summary
Noble Energy and the Israeli group Delek Energy, which have a claim to exploration in “block 12” in southern Cyprus, recently reported the potential to extract some seven trillion cubic feet of gas.

The government of Cyprus published on Monday a list of tenders for licenses to explore for gas and oil in the south of the state. Of plots numbered from 1 through 13, the twelfth (“block 12”) is already in the hands of the American company Noble Energy (70 percent) and its partner Delek Energy (30 percent).

A number of seismic surveys in the area have taken place, but no significant potential for the discovery of gas and oil has been declared. The only tip on which the contenders rely is Noble Energy’s last discovery, according to which there exists the potential to extract natural gas at a scope of 7 million cubic feet, similar to that of the neighboring Tamar gas field, off the coast of Israel.

A Calcalist examination reveals that the bid for licenses for exploration are mostly attracting foreign companies, including Gazprom, Total, cnooc of China, Edison and eni. It should be noted that enormous investment is required, such that it is not clear that local actors will aspire to formally bid in the tenders.

Among the companies operating in Israel, there is the potential interest of Noble Energy and Delek Energy, but an official announcement to that effect is not yet been made. One explanation is that these companies will want to exploit their Cypriot activity in order to create a ring of fields with one transport system.

Accountant Eitan Glazer, a partner and head of the Cleantech and Enercy at the accounting firm PwC Israel (Kesselman & Kesselman), explains that the Cypriot tax system is appealing for Israeli companies because it is determined on a case-by-case basis depending on negotiations with the Cypriot government. Glazer adds that Professor Eitan Sassinsky, who headed the Israeli tax panel to increase the state’s portion in gas discoveries, was recently invited to speak in Cyprus about the changes that took place in Israel in this field.

Sign up for our Newsletter




Cookies help us deliver our services. By using them you accept our use of cookies. Learn more... X