By Andrew Ward, Energy Editor
Israel says some of the world's biggest oil and gas companies have expressed interest in its forthcoming auction of exploration rights as the country attempts to restore confidence among investors after years of regulatory uncertainty.
Yuval Steinitz, Israel’s energy minister, will hold talks with potential Asian investors in Singapore this week after meetings in London last week.
Bids are due in November for 24 blocks being opened for drilling off the Israeli coast.
The roadshow represents an attempted relaunch of Israel’s natural gas resources among overseas investors after delays to the $6.5bn Leviathan offshore project led by Noble Energy of the US and Delek of Israel.
The project was finally approved by the Israeli government in June after surviving an antitrust investigation and a Supreme Court challenge by opponents who claimed Noble and Delek would have too much control over the country’s gas reserves.
Uncertainty over Leviathan has deterred further investment in exploration but Mr Steinitz said the regulatory framework had now stabilised.
“Israel is back in business,” he told the Financial Times.
Interest in eastern Mediterranean gas has been fuelled by big finds in Egypt, where Eni of Italy and BP of the UK have committed to large developments this year. Cyprus is also thought to have significant untapped resources.
Mr Steinitz said the region was emerging as an important new source of gas for Europe as North Sea reserves decline. “If you want to be part of what’s happening in the eastern Mediterranean, you need a presence in Israel,” he said. “Most of the natural gas in Israeli economic waters is still to be found.”
The latest geological surveys were presented at a conference in London last week and in Houston earlier this year. Once the Singapore wing is completed, most large and medium-sized oil and gas groups will have attended one of the presentations, Mr Steinitz said.
BP is among those known to have attended the London event but it and other companies contacted by the FT declined to comment on their potential interest.
Analysts said the industry remained wary of Israel after the Leviathan delays and cautioned that attracting investment in exploration anywhere in the world was currently difficult with energy companies under pressure from low oil prices.
Israel is already self-sufficient in gas from its Tamar field, operated by Noble and Delek; Mr Steinitz said Leviathan and any further finds would be used for export.
Deals have been struck with Egypt and Jordan for gas from Leviathan but the longer-term aim is to establish an export route to western Europe. Three main options are under consideration: shipping by sea from liquefied natural gas terminals in Egypt and potential pipelines through Turkey or through Cyprus and Greece.
The region’s tense diplomatic relations could complicate the push to link eastern Mediterranean gas with international markets but Mr Steinitz said there was a strong incentive for co-operation. Israel had received more visits from Cypriot and Greek leaders in the past year than for decades previously, he added.
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