Wednesday, December 9, 2015

Greece, Egypt, Cyprus to step up talks on delineating offshore exploitation rights | US News


Greece, Egypt, Cyprus to step up talks on delineating offshore exploitation rights

The Associated Press
Greek Prime Minister Alexis Tsipras, center, speaks as Egyptian President Abdel-Fattah el-Sissi, left, and Cypriot President Nicos Anastasiades listen to him during their trilateral summit in Athens, Wednesday, Dec. 9, 2015. Greece's political and business leaders promised to expand trade deals with Egypt after meetings following a massive offshore natural gas discovery in the southern Mediterranean. 

(AP Photo/Thanassis Stavrakis) 

Associated Press | Dec. 9, 2015

ATHENS, Greece (AP) — Greece, Egypt and Cyprus say they will speed up talks on how to stake out undersea territory in the Mediterranean, following the discovery of a large gas field off Egypt's coast.
At a meeting in Athens on Wednesday, the three countries' leaders issued a joint statement saying they would accelerate talks to resolve "outstanding issues" on delineating their maritime zones.
In August, Italian energy giant Eni announced the discovery of what it described as one of the world's biggest natural gas fields off Egypt. Cyprus and Greece are also hoping to exploit Mediterranean offshore gas and oil reserves.
After talks with Egyptian President Abdel-Fattah el-Sissi and Cypriot President Nicos Anastasiades, Greek Prime Minister Alexis Tsipras voiced hopes that the three countries can cooperate on gas transportation to European markets.
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

BP enlarges its stake in major gas project in Egypt's Nile Delta | Ahram Online

BP enlarges its stake in major gas project in Egypt's Nile Delta

Ahram Online , Wednesday 9 Dec 2015

BP Egypt announced on Wednesday expanding its stake in the country’s West Nile Delta (WND) gas project to 82.75 percent after completing the acquisition of additional interest from Hamburg-based DEA Deutsche Erdoel AG, the company said in a release on its official website.

The UK-based company, one of world’s leading oil and gas companies, said it has acquired 22.75 percent in the North Alexandria Concession and 2.75 percent in the West Mediterranean Deep Water Concession of the WND.

The WND project agreement concluded last March, involving the development of 5 trillion cubic feet of gas resources and 55 million barrels of condensates and is expected to produce around 1.2 billion cubic feet per day (equivalent to about 25 percent of Egypt’s current gas production) in 2017, BP said.

DEA said in May on its website that it had farmed down its stake in the $12 billion WND project BP "in order to better balance its portfolio."


Source

Analysis: Can the Mediterranean gas triangle become a pentagon? | i24 News

Three-way summit in Athens this week shines spotlight on new Eastern Med alliances and their complexities
CAIRO, Egypt — A new alliance is forming in the Eastern Mediterranean.
By Jacob Wirtschafter, 09 December 2015

As Egyptian President Abdel-Fattah al-Sisi, Greek Prime Minister Alexis Tsipras and Cyprus President Nicos Anastasiades meet in Athens Wednesday, for the third time this year, the Syrian civil war and Islamic State are at the top of their official agenda.
But it’s no secret that the three countries’ political tensions with Turkey, and their desire to develop the huge, newly discovered gas fields off their coasts, will take up much of their time.

Within a short six-year time span, Cyprus, Israel and Egypt have made five major petroleum discoveries in their territorial waters in the Eastern Mediterranean.
Cyprus’ Aphrodite field is estimated to hold 140 billion cubic meters of natural gas. The lion’s share is likely to be exported. Israel’s Tamar and Leviathan fields hold around 900 billion cubic meters of gas in total, positioning it as a future energy exporter, too.
But the largest discovery happened this year at Egypt’s Zohr field, where a find of 850 billion cubic meters - worth around $106 billion - promises not only to stop the periodic electricity blackouts in Cairo but to relaunch the country as a hub for refining and exporting energy to Europe. The finds have led to unprecedented levels of cooperation between Cyprus, Egypt and Greece.

Israel has also grown closer to Cyprus and Greece in recent years as its relations with Turkey have cooled. On his recent visit to Jerusalem, Prime Minister Tsipras said plans were underway for a Greek-Cypriot–Israeli summit to be held next month in Nicosia.

“The Israel-Greece-Cyprus alliance seeks to block Turkey’s ambitions of regional hegemony, while at the same time offering Ankara a key place in the new Mediterranean political order, if and when she comes to her senses,” noted Eran Lerman, senior research associate at Israel’s Bar Ilan’s Begin-Sadat Center for Strategic Studies.
Benjamin Netanyahu was noticeably absent from this week’s summit in Athens – and not because of the contract dispute that erupted in recent days over the failure of the Egyptian General Petroleum Corporation to deliver gas to the Israel Electric Company through a pipeline which runs across the Sinai.

As the Greeks, Cypriots and Egyptians began talks Tuesday, the Israeli PM said he would send a special envoy to Egypt to resolve the dispute between the two firms.
But prospects of a four-way summit – with Greece, Cyprus, Egypt and Israel – are slim to none. Sisi will continue the cordial phone calls with the Israeli Prime Minister but there will be no formal, publicly visible encounter as long as Jerusalem is dug in over settlement expansion in the West Bank and reluctant to accept a Palestinian state.
Greece and Cyprus, on the other hand, are also in lock-step with EU policies on Israeli-Palestinian matters - but that’s not stopping them from solidifying economic and military ties with the Jewish state.

“Major gas discoveries in Israel, Cyprus and Egypt have completely changed regional geopolitics and energy supply­­­­­,” said Mathios Rigas, chief executive officer of Energean Oil & Gas in Athens.
But Turkey has moved aggressively to stymie the countries’ efforts, reviving its traditional antagonism to Greece and the ethnic Greek government of the divided island of Cyprus.

Ankara has also worked to undermine Sisi in Egypt by hosting exiled Muslim Brotherhood politicians and subsidizing satellite TV channels denouncing the removal of former President Mohamed Morsi.

In April, as Cyprus was conducting exploratory drilling, Turkey dispatched a research vessel into the Cypriot zone — a precursor to drilling.

Tensions continued to grow in May when Nicosia invited the Egyptian and Greek navies to conduct a practice drill in the Mediterranean with Cypriot ships. Joint Egyptian-Greek air force exercises followed. The exercises were clearly aimed at Turkey.

Nonetheless, Turkey and Cyprus have intensified talks over reunification of the island, divided since 1974 between the internationally recognized Greek republic in the south and the breakaway Turkish state in the north.

Ahmed El Bassoussy a researcher at the Regional Center for Strategic Studies in Cairo, says political and economic questions are becoming fused in the region. “It seems that all involved parties began the process of exploiting and utilizing gas politically as a tool to apply pressure,” he said.

A former member of the Greek Communist Party and a leader of anti-globalization protests, Tsipras may seem an unlikely strategic partner for Egypt’s president El-Sisi, a former director of military intelligence and force behind draconian laws against public demonstrations.

But both Tsipras and Sisi share an aversion to Turkish President Recep Tayyip Erdoğan, whom they hold responsible for the rise of jihadism in the region and the exodus of refugees from Syria.

Overtones critical of Ankara were present in a briefing given by Egypt’s State Information Service as Sisi departed for Athens. “The three countries will agree on intensifying their cooperation at the diplomatic and technical levels to convey a common vision to the international community regarding jihadis,” said Information Service spokesman Salah Abdel Sadek.

Jacob Wirtschafter is a Middle East correspondent for Associated Reporters Abroad and a contributor to i24 News from Cairo. His Twitter handle is @levantreporter

Egypt's Continued Negotiation With Cyprus A Good Omen For Israel? | Natural Gas Europe






December 09th, 2015

EGYPT'S CONTINUED NEGOTIATIONS WITH CYPRUS A GOOD OMEN FOR ISRAEL?

Egypt has frozen natural gas negotiations with Israel but in parallel, told the Cypriot government that negotiations with Cyprus are to continue.
Egypt froze negotiations with Israel on Sunday after an ICC arbitration panel awarded Israel Electric Corp (IEC) compensation of $1.76 billion after Egyptian gas producers cancelled bilateral gas agreement three years ago.
The Cypriot Energy Minister Georgios Lakkotrypis said Monday that Egypt is still interested in buying Cypriot natural gas, according to a report in FG News. "Negotiations on the gas purchase are continuing on a commercial level," Mr Lakkotrypis was quoted as saying.
This should be good news for Noble Energy and Delek Group, which control the Cypriot Aphrodite and Israeli Leviathan gas fields.
Those two gas fields are close to each other and if Egypt is seriously looking to purchase natural gas from Aphrodite, then in order to make the development profitable, the Leviathan field, five times the size of Aphrodite, will have to be developed as well. This could be leverage that the Noble/Delek consortium will be able to use in their negotiations with Egyptian customers and officials in their capacity as the owners of Aphrodite.
However, for that to happen, Israel and Cyprus have to reach a unitization agreement in order to share the resources. It is assumed that Aphrodite reserves penetrate into Israel's EEZ. However, deciding how deep the penetration is and how much of the natural gas is in Israel's EEZ will be problematic and dependent mainly on political and diplomatic negotiations, though commercial interests and conflict of interest are to characterize the negotiations.
It should be noted that the penetration of Aphrodite into Israel's EEZ is in the Yishai license, which belongs to a different group of investors than the Noble/Delek consortium.
As yet, after three meetings over the last five months between Israeli Prime Minister Benjamin Netanyahu and Cypriot President Nicos Anastasiades, no breakthroughs have been achieved. Their next meeting should take place next month in Nicosia, Cyprus, at a tripartite summit meeting with also Greek Prime Minister Alexis Tsipras.
Ya'acov Zalel


 Natural Gas Europe welcomes all viewpoints. Should you wish to provide an alternative perspective on the above article, please contact editor@minoils.com  
Kindly note that we only lightly edit content for grammar and do not edit externally contributed content.

Tuesday, December 8, 2015

Netanyahu: Gas plan is vital to Israel's existence | Ynetnews

Netanyahu: Gas plan is vital to Israel's existence

PM argues the need to develop additional gas fields, revealing that Israel's power plants were hit with rockets in the past, and a lone gas rig could face a similar threat.
Roi Yanovsky, Yael Friedson

Published: 12.08.15, 13:40 / Israel News


Prime Minister Benjamin Netanyahu testified on Tuesday in front of the Knesset's Finance Committee, defending the government's natural gas plan.
Specifically, the prime minister was called to defend Clause 52, that enables the government to bypass the anti-trust regular's authority in approving the gas plan.

Netanyahu claimed in his testimony that the proposed plan was vital for the existence of the State of Israel, as it would ensure the country's energy security.
Prime Minister Netanyahu and Energy Minister Steinitz at the committee hearing
(Photo: Knesset Spokesman)
He disclosed that Israel's power plants were hit in the past by rockets launched by terror organizations, arguing that the development of additional gas fields is necessary to lower the threat on Israel's energy resources.

"Without supplies, we would not be able to operate electricity systems, and when electricity systems go down, they bring down the entire country. We've witnessed it during storms. People wouldn't be able to heat up their homes," he said.

"No one thought for a moment to put all of the country's power plants in one place," Netanyahu continued. "Imagine we join all the plants to one. Take, for example, the Hadera power plant. That place, like others, was hit by rockets. It is dangerous and irresponsible. The rockets are just going to become more advanced," he said.

During Operation Protective Edge in 2014 and Operation Pillar of Defense in 2014, terror organizations in the Gaza Strip tried to fire rockets at facilities of the Eilat Ashkelon Pipeline Company in southern Israel and at the Ashkelon power plant, and were able to hit the power plant several times.

The rocket fire at the Ashkelon power plant caused damage, but did not paralyze or significantly disrupt the plant's operations.

"The most vulnerable thing is the gas rigs, it's more vulnerable than a gas pipe because they can be hit by rockets. The plan is a way to create reserves and have several fields rather than have just one field that would be under threat and very dangerous," the prime minister explained.

He also asserted that "the natural gas provides Israel with a much stronger and sturdy base against international pressures," adding that there are already talks with Ankara about importing Israeli gas to Turkey.

Responding to claims from members of the committee that the plan would hurt competition in the natural gas market, Netanyahu said that "if we do not approve the plan, we'll remain without competition, without gas fields, without energy security and without the ability to export. I've seen supervision over prices, and that does not appeal to investors."

He warned of Israel becoming "a state of over-regulation," asserting that "the incessant interference gives the Israeli economy a bad name, and I'm not just talking about the energy sector."

Netanyahu took on the authorities of the Economy Ministry after Shas chairman Aryeh Deri, who refused to sign off on the clause bypassing the anti-trust regulator, had to resign from his role at the head of the ministry.

While Netanyahu was testifying, protesters against the gas plan gathered outside the Knesset, where the committee was holding its discussion, and outside the Prime Minister's Residence in Jerusalem, demanding the Knesset not to approve the plan.

Under the proposed gas plan, Israel's Delek and Texas-based Noble Energy, which own a number of recently discovered gas fields that supply factories and Israel's electric company, will continue to own Israel's largest natural gas field, Leviathan.

Leviathan, with estimated reserves of 22 trillion cubic feet (tcf), will take about 3-1/2 years to develop and is expected to supply billions of dollars of gas to Egypt and Jordan in addition to supplying Israel.

However, Delek - through its units Delek Drilling and Avner Oil Exploration - will have six years to sell its entire 31.3 percent stake in a second large field, Tamar, and Noble will have to trim its stake in Tamar to 25 percent from 36 percent.

The companies will also be forced to sell two smaller fields, Tanin and Karish, within 14 months.

Tamar, with reserves of about 10 tcf, began production in 2013 to supply the domestic market and is due to be expanded for export. Tanin and Karish hold a combined 3 tcf.

The government will set a price ceiling and the deal will remain unchanged for 10 years.

Reuters contributed to this report.


Source

East Mediterranean Gas awarded $324m. from Egyptian national gas companies | Jerusalem Post

East Mediterranean Gas awarded $324m. from Egyptian national gas companies

By SHARON UDASIN \  12/08/2015 21:20






Following the IEC’s announcement on Sunday, the Egyptian government responded by declaring that it would appeal the order.

East Mediterranean Gas (EMG) – the multinational body responsible for the operation of the now defunct gas pipeline from Egypt to Israel – has been awarded $324 million from two Egyptian national gas companies, lawyers for the firm reported on Tuesday. 

With the conclusion of arbitrations at the International Chamber of Commerce on Thursday, EMG is now entitled to receive the $324m. sum, as well as a substantial portion of the company's legal fees and arbitration costs, from the Egyptian Natural Gas Holding Company (EGAS) and the Egyptian General Petroleum Corporation (EGPC), a statement from the attorneys said. 

The announcement comes two days after the Israel Electric Corporation revealed similar news, in which the International Chamber of Commerce awarded the Israeli company $1.76 billion from the same two firms, due to damages incurred from a cessation in gas supply in 2012. 

In 2008, EGPC and EGAS began selling gas to the IEC, through the EMG pipeline – supplying the country with about 40 percent of its natural gas provisions. Yet saboteurs began thwarting the flow through Sinai pipeline explosions in 2011, which ultimately led the Egyptian government to terminate the gas sale agreement with Israel in April 2012. 

Following the IEC’s announcement on Sunday, the Egyptian government responded by declaring that it would appeal the order as well as freeze gas import talks with Israel until the matter was resolved. While full-fledged gas deals between the two countries have not yet been realized, four letters of intent between the Israel reservoir developers and companies in Egypt have been signed over the past year-and-a-half. 

During a Knesset Economic Affairs Committee discussion on Tuesday, Prime Minister Benjamin Netanyahu briefly referred to the matter, explaining that on Monday, he informed the Egyptian government that he would be sending a special envoy to Cairo to discuss the matter. 

“I believe that a solution will be achieved for the common interests of both sides,” Netanyahu said. 

On Monday, Israel’s Tamar and Leviathan gas reservoir partnerships stressed that the Egyptian government’s threats would have no impact on gas export negotiations, which are continuing to take place with private companies operating there. 

Regarding EMG's award, the company's legal team – the Tel Aviv-based Freshfields, M. Firon & Co., and the Cairo-based Shahid Law Firm – stressed that the decision has "vindicated EMG's recourse to International Chamber of Commerce arbitration in Geneva over EGPC and EGAS's objections."

In addition, the lawyers continued, the award has "held that EGPC and EGAS repudiated both the general gas sale agreement with EMG and a tripartite agreement between EMG, EGPC/EGAS, and the IEC, which covers the gas volumes that EMG sold to IEC."

“EMG continues to pursue substantial claims against EGPC/EGAS in another arbitration proceeding, including in relation to the majority of gas volumes which were not addressed by the International Chamber of Commerce award,” their statement added.

Source

Prospects for Cyprus' natural gas 'promising', experts at Energy Symposium say | Cyprus News Agency

Prospects for Cyprus' natural gas 'promising', experts at Energy Symposium say 

CNA - NICOSIA 8/12/2015 17:09

The challenges and opportunities in the energy sector for Cyprus were the focus of a discussion among experts during the 4th Energy Symposium, held on Tuesday in Nicosia.

The demand and the supply of natural gas in Egypt will continue to increase and Egypt continues to be very interested in the Cypriot natural gas, said Dimitris Fessas, Manager at Cyprus Hydrocarbons Company. He added that a few weeks after the discovery of Zhor gas field, in the Egyptian offshore, there was a reassessment of the new situation, but it became apparent that Cyprus' strategy still remains on the table.

He added that Egypt`s plan on Zhor is to meet the needs of the domestic market, noting that the liquefaction terminals of BG and those at the city of Damietta are potential buyers of Cypriot gas.

Fessas said that there are potential buyers who resell domestically and explained that the final agreement will depend on various parameters such as quantities, prices and guarantees given.

According to Fessas, the discovery of Zhor in Egypt can be considered competition as well as an opportunity for synergies in the region. He said the joint development of deposits will create economies of scale, reduce costs and increase profits.

Greece is willing to act as a transit country for Cypriot and Israeli natural gas, on its way to Europe, Greece`s Minister of Environment and Energy Panos Skourletis has noted. In a written address that was read at the symposium, Skourletis notes that this can be done either through tankers, or directly through the EastMed pipeline, yet to be constructed.

Skourletis highlighted Greece`s ambition to become an energy hub in South East Europe and contribute to the continent`s energy security. He remarked that there is particular mobility as of late concerning LNG, with an aim to enhance the security for natural gas in the region.

Athens seeks to play a central role in the region, due to a combination of gas pipelines running through the country, the Greek Minister said, making particular reference to IGB connecting Bulgaria with Greece, the natural gas hub in northern Greece and the designs for a new Russian gas pipeline, expected to extend to Greece and Italy.

Speaking about the discovery of natural gas resources in Cyprus` exclusive economic zone, Skourletis said this has altered the geopolitical facts in the region, putting the country at the center of the energy map of Southeastern Mediterranean.

Petroleum geologist Constantinos Nicolaou appeared optimistic that Cyprus has similar geological structures such as those discovered in Zhor. He explained that the giant discovery in Egypt` offshore was made possible when ENI changed its geological model and searched reefs instead of drilling in sandy areas with rocks.

CEO at Cyprus Natural Hydrocarbons Company Ltd, Charles Ellinas said that Cyprus should keep all options open in relation to the development of its natural gas and should develop a plan B and C, because of the increasingly reduced price of natural gas.

Ellinas also said that Cyprus must reconsider the option of compressed gas in order to achieve more competitive prices.

According to Ellinas, “we have put all our eggs in one basket” and he appeared concerned over the fact that Egypt has large gas reserves which will be developed over the next few years.

Ellinas also said that the recent decision to end talks between Israel and Egypt complicates the situation in the region.

Former Director of the Energy Department at the Energy Ministry, Solon Kasinis said that the proximity of Zhor deposit to Cyprus` exclusive economic zone (EEZ) is very promising, adding that it seems that “we will be key players in the region.”

He expressed hope that drilling in Block 11 by French company Total in 2016 will yield significant results.

CNA/TNE/GS/AGK/KCH/MM/2015
ENDS, CYPRUS NEWS AGENCY

*CNA reserves the copyright to the news stories it files, which is granted to subscribers for specific use only.

Source

Anastasiades and Netanyahu talk prior to Athens meetings | Famagusta Gazette

They also spoke about issues of regional cooperation.
Nicos ANASTASIADES of CYPRUS & Benjamin NETANYAHU of ISRAEL

CYPRUS - FAMAGUSTA GAZETTE • Tuesday, 08 December, 2015

President Anastasiades and Israeli Prime Minister Netanyahu have spoken about their bilateral relations, issues concerning the preparation of the tripartite meeting between Cyprus, Greece and Israel in January, as well as the latest developments of the Cyprus issue.


The two leaders held a phone conversation Tuesday morning.

The two discussed the tripartite meeting between Cyprus, Greece and Egypt that will take place in Athens tomorrow. 

They also spoke about issues of regional cooperation.

— © FAMAGUSTA GAZETTE CYPRUS


Source

Egypt - Israel gas spat does not affect Cyprus, says Minister | Famagusta Gazette

Egypt - Israel gas spat does not affect Cyprus, says Minister

Lakkotrypis said the Egyptian Prime Minister Ibrahim Mahlab called him on Sunday to tell him that Egypt's interest in buying Cypriot gas was unaffected by its row with Israel.
Yiorgos Lakkotrypis, Minister of Energy, CYPRUS (EU)

By Petros Petrides • Tuesday, 08 December, 2015
Egypt has told Cyprus that its decision to freeze negotiations with Israel to purchase natural gas does not affect its intention to buy Cypriot gas, Energy Minister Yiorgos Lakkotrypis said on Monday.

The Egyptian government ordered a freeze on imports of Israeli natural gas after the International Chamber of Commerce ruled that Egypt was liable to pay 1.76 billion U.S. dollars in compensation to Israel's Electric Corporation after it canceled their bilateral gas deal in 2012.

Egypt said the freeze would last until at least after an appeal against the ruling.

Lakkotrypis said the Egyptian Prime Minister Ibrahim Mahlab called him on Sunday to tell him that Egypt's interest in buying Cypriot gas was unaffected by its row with Israel.

"Negotiations on the gas purchase are continuing on a commercial level," Lakkotrypis added.

Meanwhile, the British Gas (BG) Group, which owns a liquefaction plant at Idku, is negotiating with U.S.-based Noble Energy to buy gas from a field it discovered in Cyprus' offshore economic zone.

BG Group has also made an offer to buy a 35-percent share in the field for 186 million dollars, which Noble Energy said contains at least 127 billion cubic meters of gas.

Lakkotrypis said BG's request was currently being processed following its approval by the Cypriot government.

He also said that a planned three-party summit between Egypt, Cyprus and Greece on Dec. 9 in Athens would go ahead as planned.
— (Xinhua)

Source

Monday, December 7, 2015

Reference to Press Releases regarding the Suspension of Negotiations for Export of Natural Gas to Egypt | Delek Group

Reference to Press Releases regarding the Suspension of Negotiations for Export of Natural Gas to Egypt
Download PDF Download PDF

Tel Aviv, December 7,  2015. Delek Group (TASE: DLEKG, US ADR: DGRLY) (“the Company”) announces that attached is an  Immediate Report just published by Avner Oil Exploration Limited Partnerships and  Delek Drilling Limited Partnerships ("the Partnerships") concerning  various reports in the media with regard to freezing the talks in connection with  the import of natural gas to Egypt. It is noted that as per this immediate  report, the Delek Group Partnerships as well as other partners in the various  projects in Israel are not parties to the arbitration proceeding with the  Egyptian National Gas Companies.

In response  to various reports in the media according to which the Egyptian government has  instructed the Egyptian national gas companies (Egyptian General Petroleum  Corp. and Egyptian Natural Gas Holding Co.) (the "Egyptian National Gas  Companies") to freeze the talks in connection with the  import of natural gas from Israel to Egypt, due to the ruling made in the  arbitration proceeding between the Israel Electric Corporation Ltd. and the  Egyptian National Gas Companies, we hereby clarify as follows:

The  Partnerships and its partners in the various projects in Israel are not parties  to the arbitration proceeding with the Egyptian National Gas Companies. As  stated in Articles 7.13.5 and 7.14.2 of the Partnerships' periodic report dated  December 31, 2014 which was published on March 18, 2015, the Partnerships and  its partners in the Leviathan project and the Tamar project, are holding  negotiations, in various stages, for the export of natural gas to neighboring  countries, including Egypt.

The  aforementioned negotiations are not with the Egyptian National Gas Companies  but rather with commercial companies. The Partnerships and its partners in the  Leviathan project and the Tamar project are in regular contact with these  companies and are continuing the aforementioned negotiations as planned. In  addition, the parties will continue to work with the competent authorities in  the governments of Israel and Egypt for obtaining all the required approvals in  connection with the agreements for the export of gas from Israel to Egypt.

Forward Looking  Information Warning - The information  specified above in relation to the aforementioned negotiations, constitutes  Forward Looking Information as such term is defined in section 32A of the  Securities Law-1968, and there is no certainty that such information will be  realized, fully or partially, in the abovementioned manner or in any other  manner, and it may be realized in a materially different manner than described  above, and in particular there is no certainty that the aforementioned  discussions and/or negotiations will mature into binding gas sale agreements  and that the conditions required under law for the entering into affect of such  agreements will be satisfied, to the extent such agreements will be signed,  including the obtaining of all the required approvals from the competent  authorities in Israel and in Egypt.

The partners in the Leviathan project and their  interests are as follows:
Noble Energy Mediterranean Ltd.                             39.660%
Avner Oil Exploration Limited Partnership              22.670%
Delek Drilling Limited Partnership                           22.670%        
Ratio Oil Exploration (1992) Limited Partnership    15.000%

The partners in the Tamar project and their interests  are as follows:
Noble Energy Mediterranean Ltd.                         36.00%
Isramco Negev 2, Limited Partnership                  28.75%
Avner Oil Exploration – Limited Partnership       15.625%
Delek Drilling – Limited Partnership                    15.625%        
Dor Gas Exploration – Limited Partnership           4.00%

This is a convenience translation of the original HEBREW immediate  report issued to the Tel Aviv Stock Exchange by the Company on December 7, 2015.

About The Delek Group
The Delek Group, Israel's dominant integrated energy company, is  the pioneering leader of the natural gas exploration and production activities  that are transforming the Eastern Mediterranean's Levant Basin  into one of the energy industry's most promising emerging regions. Having  discovered Tamar and Leviathan, two of the world's largest natural gas finds  since 2000, Delek and its partners are now developing a balanced, world-class  portfolio of exploration, development and production assets with total gross  natural gas resources discovered since 2009 of approximately 40 TCF.

In  addition, Delek Group has a number of assets in downstream energy, water  desalination, and in the finance sector.

For more information on Delek Group please  visit www.delek-group.com

Contact
Investor Relations
Delek Group
Tel: +972 9 863 8444
Email:investor@delek-group.com


Egypt halts Israel gas talks after hefty fine | Press TV

Mon Dec 7, 2015



Egypt has frozen gas talks with Israel after being ordered by an arbitration group to pay $1.76 billion in fines for cutting some of the world’s cheapest gas to the Tel Aviv regime.

Cairo said it will appeal the order by the Paris-based International Chamber of Commerce to pay the hefty fine to Israel for halting gas supplies to the occupied territories three years ago.

Egypt cancelled a 20-year deal for supply of natural gas to Israel in 2012 following the ouster of former dictator Hosni Mubarak.

Διαβεβαιώσεις από Αίγυπτο: Θέλουν κυπριακό ΦΑ | Sigma Live

Διαβεβαιώσεις από Αίγυπτο: Θέλουν κυπριακό ΦΑ
07.12.2015 13:12

Η απόφαση της αιγυπτιακής κυβέρνησης να παγώσει τις

διαπραγματεύσεις έλευσης φυσικού αερίου από το Ισραήλ προς την Αίγυπτο δεν επηρεάζει την Κύπρο, δήλωσε ο Υπουργός Ενέργειας, Γιώργος Λακκοτρύπης.

Σύμφωνα με τα όσα μεταδίδονται, η Κυβέρνηση της Αιγύπτου αποφάσισε χθες το απόγευμα να διακόψει τις συνομιλίες με το Ισραήλ για αγορά φυσικού αερίου.

Ο Γιώργος Λακκοτρύπης είπε ότι δεν θα υπεισέλθει στις διαφορές των δύο χωρών, διότι είναι κάτι που αφορά τις ίδιες και όχι την Κύπρο.

Israel Electric Faces $800 Million Tamar Contract Loss | Natural Gas Europe

December 07th, 2015t

ISRAEL ELECTRIC FACES $800 MILLION TAMAR CONTRACT LOSS

Israel Electric Corp. (ICE) will have to pay $800 million to the Tamar Partnerships for natural gas it will not use, according to the corporation's latest filing with the Tel-Aviv Stock Exchange (TASE).  
In 2012, IEC signed a Take-or-Pay (ToP) 15-year contract with Tamar Partnerships for the years 2013-2028 for a purchase of 90 bcm natural gas.
In the filing, ICE estimates that the quantity of natural gas it will consume in the coming years will be smaller than its purchase obligation under the contract.
Therefore, in the years 2018-2019, IEC said it expects to pay $400 million and until to 2023 another $400 million for natural gas it will not consume, an expenditure that will not be covered by revenues. IEC said that it will try to sell the gas in the secondary market but if it fails it will ask raising electricity tariffs to cover those expenses.
Under normal circumstances, IEC would have to report a loss of $800 million due to its estimation error. However, Tamar Partnerships helped it to avoid such a grim outcome. In a letter from November 19, Tamar Partnerships said it will be ready to supply IEC with natural gas beyond the contract end-date in 2028. IEC will have to pay for the natural gas supply years before actual consumption, a situation that will probably create difficulties in cash flow.
The surplus issue has been known for two years and last year, in order to mitigate the situation, IEC was allowed by the regulator to sell 1 bcm of gas on the secondary market. Recently it was allowed to sell 4 bcm untill 2020, priced at 12% above the purchase price.
In a response, IEC said that according to an agreement reached with Tamar Partnerships, the company's exposure was significantly reduced and raising electricity tariffs is a solution of last resort, which currently seems unlikely.
Tamar Partnerships main partners are Noble Energy (36%, the operator), Delek Group (31.25%), Isramco (28.75%) and Alon (4%).
Ya'acov Zalel


 Natural Gas Europe welcomes all viewpoints. Should you wish to provide an alternative perspective on the above article, please contact editor@minoils.com  
Kindly note that we only lightly edit content for grammar and do not edit externally contributed content.

Day of High Drama Sees Egypt Freeze Gas Negotiations With Israel | Natural Gas Europe






December 07th, 2015
t
Relations between Israel and Egypt sank to a new low yesterday after two Egyptian gas companies, EGAS and EGPC, were ordered by the ICC arbitration panel to pay $1.76 billion in compensation to Israel Electric Company Corp (IEC).
Another company, EMG, which oversaw Israeli-Egyptian gas deals from 2008 to 2012 has been awarded $288 million in compensation. EMG built and operated the 60 km EMG undersea pipeline, between al-Arish in North Sinai and the Israeli town of Ashkelon, which delivered Egyptian natural gas to Israel.
In response to the arbitration results, Egypt said it would appeal the arbitration outcome and the two Egyptian companies said they were ordered by the Egyptian government to freeze further negotiations with Israeli gas companies over future deals. On the heels of the Egyptian announcement, Israel's Energy Minister, Yuval Steinitz, said that Israel will promote other export options to other countries in the region, such as Jordan, Greece and Turkey and also with countries in Western Europe.
These events took place during the Knesset's Economic Affairs Committee's natural gas regulatory framework deliberations, expected to reach a crescendo when Prime Minister Benjamin Netanyahu testifes before the committee Tuesday morning. Mr. Netanyahu will have to justify his support for the framework despite export to Egypt, the framework's main pillar, which is now in doubt.  Mr. Netanayahu and his supporters claim that supplying Egypt with Israeli gas would help stabilize President el-Sisi's regime since Egypt is experiencing gas shortages. However, that same regime froze gas negotiations with Israel yesterday (December 6), at least for the time being.
The arbitration result was revealed Sunday morning when IEC reported to the Tel Aviv Stock Exchange (TASE). The corporation said that it will act toward collecting the sums it is entitled to according to the arbitration result. The arbitration claim, totalling approximately $5 billion, was filed 3.5 years ago by IEC and EMG. In addition to the $1.76 billion in compensation, IEC will receive interest payments according to a mechanism that was decided in the arbitration and partial coverage of legal expenses.
The arbitration in Geneva, Switzerland was heard before a panel of three lawyers. Deliberations and conclusions are confidential and usually cannot be challenged in an appeal though this time it looks as if an appeal will be heard by Swiss courts and the final dispute results may be delayed for a few years. In its defense during the arbitration, Egypt claimed for a force majeure that caused the halt natural gas supply to Israel.
From 2011-2013, until Tamar gas field started gas production in the spring of 2013, supply interruptions and eventually the contract cancellation, cost the IEC NIS20 billion ($5 billion) in overpayments for the purchase of more expensive fuels for power generation. Currently, IEC's debt is over NIS 70 billion.
Egypt, as part of its negotiations with potential Israeli gas exporters, demanded dropping all arbitration claims. One arbitration currently ongoing is an $8 billion arbitration claim, filed by EMG shareholders, against the Egyptian companies for disrupting the natural gas supply in 2011 and 2012.
During those years, following the dismissal of the Hosni Mubarak, the former President of Egypt, terror attacks on the pipeline in the Sinai Peninsula were commonplace, causing damages and interrupted supply to Israel and Jordan. Following those attacks, regime changes in Egypt and natural gas shortages in the country, the contract was eventually cancelled.
Egypt also demanded in the past that Union Fenosa Gas's (UFG) contract with Tamar Partnerships would be conditioned upon the former, dropping its $6 billion arbitration claim against Egypt.
The arbitration result has, therefore, the potential to derail the Tamar and Leviathan Partnership negotiations with Egyptian customers or with international energy companies which operate the liquefaction facilities in Egypt, although so far it is not clear whether Egyptian companies, EGAS and EGPC, were part to these negotiations. The only contract signed so far between Tamar Partnerships and an Egyptian entity was with Dolphinus Holdings, a private, non-governmental body that represents private businesses in Egypt. However, the 5 bcm, 3 year contract signed in March 2015 was not approved by the Israeli government.
Speaking with Natural Gas Europe before Egypt announced the negotiation freeze, Oded Eran, a former Israeli ambassador to Jordan and to the EU, and currently a senior researcher at the Institute for National Security Studies in Israel (INSS), estimated that the arbitration process will have only limited influence over commercial negotiations. "It is a totally a commercial thing and quite negligible to the diplomatic relationship [between Israel and Egypt]" he said, referring to the arbitration results. "The two countries have two main common interests: security cooperation in Sinai, fighting terror organizations and the big gas contracts. The interest here is much bigger than obligations from the past. It will be right to remove this affair from the headlines and finish it off."
Ya'acov Zalel


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Israel Counts on Egypt Ties to Overcome $1.7 Billion Gas Hurdle | Bloomberg

Alisa Odenheimer


Yuval Steinitz, Photographer: Scott Eells/Bloomberg


December 7, 2015

Israel is banking on its “close ties” with Egypt to help restart gas export talks, Energy Minister Yuval Steinitz said, following an Egyptian decision to halt negotiations. Israel is also planning to advance exports to other markets including Jordan, Turkey and Western Europe, he said.

“The State of Israel assigns great importance to its security and energy ties with Egypt in their entirety, and hopes that due to its close bilateral ties, it will be possible to continue to move forward on the gas issue soon,” Steinitz said on Monday. Israel must develop its offshore gas fields quickly to achieve energy security, he said.

Ρήξη στα ενεργειακά μεταξύ Αιγύπτου - Ισραήλ | ΦΙΛΕΛΕΥΘΕΡΟΣ

Ρήξη στα ενεργειακά μεταξύ Αιγύπτου - Ισραήλ

Τηλεφωνική επικοινωνία Αιγύπτιου Πρωθυπουργού με Λακκοτρύπη
Δευτέρα, 07 Δεκεμβρίου 2015


Λονδίνο: Την διακοπή κάθε επαφής και των σε εξέλιξη συνομιλιών για εξαγωγές φυσικού αερίου από το Ισραήλ αποφάσισε χθες το απόγευμα η κυβέρνηση της Αιγύπτου. Αιτία, απόφαση διεθνούς διαιτησίας που αναγκάζει την Αίγυπτο και κρατικές της εταιρείες να καταβάλουν στο Ισραήλ αποζημιώσεις ύψους 1,6 δις δολάρια, για την διακοπή παροχής φυσικού αερίου από την Αίγυπτο προς το Ισραήλ, το 2012. 

Η προσφυγή είχε γίνει από την Εθνική Εταιρεία Ηλεκτρισμού του Ισραήλ και την εταιρεία που κατείχε τον αγωγό, ζητώντας αποζημιώσεις 4 δις δολαρίων για ζημιές και την διαφορά στο κόστος καυσίμου που αγόραζε μετά την διακοπή παροχής φυσικού αερίου από την Αίγυπτο.

Η διαιτησία έκρινε ότι πρέπει να καταβληθούν αποζημιώσεις 1.6 δις δολάρια, εκ των οποίων τα 245 εκ. στην εταιρεία του αγωγού.

Η διακοπή παροχής ήταν αποτέλεσμα πέραν των 10 διαδοχικών δολιοφθορών στον αγωγό, με εκρήξεις κατά την περίοδο της κρίσης στην Αίγυπτο από εξτρεμιστές και Ισλαμιστές, ωστόσο αυτό δεν  απέτρεψε την επιβολή  αποζημιώσεων.

Η Αίγυπτος θα καταβάλει τις αποζημιώσεις εντός έξη εβδομάδων, δήλωσε ο πρωθυπουργός της χώρας, ενημερώνοντας ότι θα εφεσιβάλει την απόφαση και ανακοινώνοντας όμως ταυτόχρονα ότι σταματούν οι διαπραγματεύσεις για αγορά Ισραηλινού αερίου από την χώρα.

Υπενθυμίζεται ότι μετά την υπογραφή Μνημονίου Συναντίληψης, μεταξύ των Noble - Delek και κοινοπραξίας κρατικών και ιδιωτικών εταιρειών της Αιγύπτου, στις 25 Νοεμβρίου, ξεκίνησαν εντατικές επαφές για εξαγωγές από Ισραήλ, ενώ με άλλο μνημόνιο που υπογράφτηκε πέρσι, οι διαπραγματεύσεις βρίσκονταν στο στάδιο των συμφωνιών για αγωγό.

Σύμφωνα με πληροφορίες μας, ο πρωθυπουργός της Αιγύπτου, πριν ανακοινώσει την απόφαση της κυβέρνησής του, επικοινώνησε προσωπικά με τον Υπουργό Γιώργο Λακκοτρύπη, τον οποίο και ενημέρωσε πως το πάγωμα των διαπραγματεύσεων με Ισραήλ σε καμιά περίπτωση δεν θα επηρεάσει την Κύπρο με την οποία οι διαπραγματεύσεις συνεχίζονται κανονικά.

Γράφει: Πέτρος Θεοχαρίδης
Source

Sunday, December 6, 2015

Egypt to pay Israel Electric $1.76 bln for halting gas supplies | Ahram Online

Egypt to pay Israel Electric $1.76 bln for halting gas supplies
Reuters , Sunday 6 Dec 2015
Gas pipeline running from Egypt to Israel (AFP)

Egyptian Dolphinus signs preliminary natgas supply deal with Israel's Leviathan
Israel Electric Corp , Israel's state-owned electric utility, said on Sunday Egyptian natural gas companies will pay compensation of $1.76 billion for halting gas supplies.

Egypt had been selling natural gas to Israel under a 20-year agreement, but the deal collapsed in 2012 after months of attacks on the pipeline by militants in Egypt's Sinai peninsula.


Egypt Mediterranean Gas, the company that oversaw the gas deal, sued for $4 billion in damages, but an international arbitrator awarded Israel Electric $1.76 billion plus interest and legal expenses, the Israeli company said in a statement.

The company said it had suffered heavy damages after gas supplies were halted and that it was forced to buy more expensive fuel to generate electricity, raising its costs. 

Source: http://english.ahram.org.eg/News/172723.aspx

Atlantic Council summit | in-business.com (Cyprus Weekly)

Atlantic Council summit
Charles Ellinas06/12/2015
The European Commission is promoting Energy Union and security through diversification of energy supplies to break up what it sees as effectively Russian monopoly in many member states. It promotes interconnectors, LNG terminals and other projects among which is the North-South Gas Corridor. This is not about getting Russia out of Europe, but Russia has to play within the rules of the game.

The unthinkable is already happening in Cyprus. Turkey’s accession to the EU has been transformed because of Syria and the refugees, making Cyprus less important, and there is now real pressure to open more chapters and work more closely with Turkey.
The highly influential US think-tank Atlantic Council held its 7th annual Summit in Istanbul last month. I attended as one of 600 invited international delegates. The summit concentrated on global and regional energy and economic issues.
The Atlantic Council’s goal is to “work together to secure the future” and it works closely with the US government. Through the papers it publishes, the ideas it generates, and the communities it builds, the Council shapes policy choices and strategies to “create a more secure and prosperous world”.
Fatih Birol, Executive Director of IEA, said cheap oil is good for the global economy, but it is causing a decline in new oil&gas projects. If prices remain at $50-$60 per barrel for 10 years, which is possible, 75% of the world’s oil will be dependent on the Middle East with its inherent instabilities and security challenges. A prolonged period of low investment will cause increasing supply problems. Low oil prices are also affecting negatively the drive to implement energy efficiency and, notwithstanding COP21, delay the wider use of renewables.
Despite the fast growth of renewables now making a serious contribution to global energy, fossil fuels will still account for over 80% of the world’s energy needs by 2035.

A year ago, nobody expected oil prices to stay below $100. Now oil companies are learning to live with ‘lower for longer’ prices. The US has over 4,000 independent oil&gas producers and it is a resilient market fully based on supply and demand. If the oil price goes up shale oil production will go up and more flexibly, and vice-versa. Combined with more oil from Iran, Iraq and possibly Libya over the next few years, it will keep oil prices ‘low for longer’.

Similar arguments apply to gas. New LNG coming into the market from Australia and the US, and possibly others, will keep prices low for a long time. The additional problem for gas is that coal is cheap, and in Asia gas prices will be squeezed between coal and renewables.

European energy security

It was made clear that success with such projects can be assured only through the participation of and funding by private industry. It is not the role of the EU or its member states to fund projects, only to regulate and promote them. Private industry will invest only when a project becomes serious, risk is managed and commerciality is assured.

However, even though Energy Union is gaining momentum, if not carefully managed it may lead to conflicts between member states and to stranded assets. Statoil went as far as to say that Energy Union has developed away from its intended concept to reinforce EU energy security and it is backfiring. It has led to increasing use of coal and ballooning subsidies of renewables.

Whatever happens in 2016 will affect Europe in the years to come. In terms of gas, Europe is divided in two: one that is liquid and well-connected and another which is dependent, requiring diversification. We are in a transformative era driven by technology. LNG is one such case. Europe needs more than interconnectors – it needs LNG terminals in southeast Europe. But such projects need to be funded – they may not be economic and companies may not fund them.

The industry view was that LNG will play a role in Europe, but too much is made of it. These are not commercial projects and the private sector will not invest in them.

Price is the deciding factor – LNG has to compete with piped gas to make a breakthrough in European gas markets and not just be a back-up. That’s how Russia is selling its gas to Europe – it is cheap.

The German view was that LNG is welcome, but indigenous gas is depleting fast and EU needs Russian gas. Other sources are good but limited. The EU should let the market decide. Everybody should be welcome to supply gas to Europe, but at the right price.

Europe needs a balance between energy sources, including renewables, in line with low carbon targets. This is still lacking and that’s why it is in the current, unbalanced situation. Gas has an important role to play as a transition fuel.

Impact on the East Med

Turkey wants to become a bridge between the region and EU energy markets – 70% of global gas resources are east of Turkey and 60% of consumers to the west – Turkey is the conduit.

The Israel-Turkey relationship is improving, with indications becoming more positive. This may eventually facilitate Israeli gas going to Turkey.

The region cannot have silos – the East Med, southeast Europe, the Balkans are all inter-connected. But in the region every country wants its own gas hub –but they cannot get it.

However, there is a case to develop a regional liquid trading system as in Western Europe. This would require a single regulatory and pricing regime aligned to Europe. Greece and Turkey may be able to achieve this if they cooperate.

The development of Zhor is a blessing for Egypt, but gas prices may be a challenge for LNG exports from East Med to Europe. Even though geopolitically gas export cooperation between Israel, Jordan, Cyprus and Egypt would be good, it may face challenges. Other options should be kept open, including exports to Turkey and through Turkey to Europe, marine CNG to southeast Europe and even FLNG for stranded assets. The region may need bold ideas.

US Deputy Secretary of State Antony Blinken stressed East Med regional cooperation.

In this context, he specifically referred to Israel-Jordan working together to build a pipeline to supply Israeli gas to Jordanian industry. When referring to Cyprus, he urged Greek and Turkish Cypriots to get together to develop energy and allow gas to flow to Europe.

Charles Ellinas is a hydrocarbons business consultant


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