Israeli Energy Ministry Relaunches Mediterranean Gas Exploration Tender Amid Regional Conflict
The Israeli Ministry of Energy has launched its fifth tender for natural gas exploration in Israel's exclusive economic zone in the Mediterranean Sea, approximately five months behind schedule. The tender, initially planned for February 2024, was delayed due to the outbreak of the Second Iran War, which led to the temporary shutdown of key offshore gas platforms amid security concerns. The tender area covers about 7,600 square kilometers and includes five blocks for which exploration licenses will be granted over several months, with the entire process expected to conclude within a year.
Despite previous exploration rounds over the past decade yielding limited success, such as small gas fields discovered in the first round and legal disputes stalling the third, the Energy Ministry remains optimistic. It estimates the area holds several hundred thousand BCM of natural gas and potential oil reserves in some blocks. The ministry aims to attract major international energy companies to invest in Israel’s gas sector, with Energy Minister Eli Cohen emphasizing efforts to increase domestic gas production and export capacity.
Cohen highlighted ongoing plans for a "roadshow" in the United States and parts of Europe to engage new international players, noting interest from a significant company, likely American, comparable in scale to Chevron. This initiative comes amid concerns that regional instability following the October 7 attacks and ongoing conflict could deter foreign investment. However, the ministry believes Israel’s regulatory stability and infrastructure protection will reassure investors.
The tender also aligns with forthcoming policy recommendations from a committee led by Energy Ministry Director-General Yossi Dayan, tasked with setting natural gas conservation guidelines. The State Comptroller recently warned that Israel could lose its energy independence within 22 years as gas reserves deplete by the early 2050s. Dayan indicated the committee’s final recommendations will be published soon.
During the Second Iran War, the Karish platform operated by Energean and the Leviathan platform operated by a partnership including Chevron, NewMed, and Ratio were shut down for weeks due to missile threats, with compensation requests from operators remaining unanswered. The Energy Ministry expects the new tender to boost competition, lower prices, and increase state revenues through royalties and taxes, reinforcing the local gas market’s priority.
