Israel will award an exploration license to a consortium of Indian state firms led by ONGC Videsh in an auction of its offshore gas fields that saw tepid response from global companies.
The decision to award the license, coming just ahead of Israeli Prime Minister Benjamin Netanyahu’s proposed mid-January visit to India, is being seen as another step in energising relations between the two countries.
The consortium of ONGC Videsh, Bharat Petro Resources, Indian Oil and Oil India will be granted an exploration license while Greece’s Energean will receive five licenses, Israel’s Energy Ministry said in a statement.
Indian consortium and the Greece firm were the only bidders in the 1st Israeli Offshore Licensing Round that closed last month. The auction, launched in November 2016, was extended twice to attract more bidders. It offered 24 blocks with an estimated in-place reserve of 6.6 billion barrels of oil and 2137 billion cubic meters of natural gas.
Within 30 days of winning announcement, the bidders have to pay signature bonus, license fee and offer appropriate guarantees to complete the granting of the licenses, the statement said.
ONGC Videsh, as a new operator in Israel, must appoint a local representative and be registered as a foreign company in Israel’s Corporations’ Authority, the statement said.
The winners would get an exploration license for three years, which can be extended by another three years if the licensee has implemented the work plan and commit to carry out drilling during the extension period. A license holder has to deposit a guarantee of $2.5 million to $10 million, pending on the work program commitments.
Indian state firm’s decision to bid for Israeli fields came following a diplomatic push between the two countries to strengthen ties in various fields. A visit by Prime Minister Narendra Modi to Israel was followed by a visit in August by a delegation comprising Oil Ministry officials and state firms’ executives to the Middle-East nation. The companies then evaluated the Israel’s invitation to participate in the exploration round and decided to bid.
Indian state oil firms have been seeking to develop an Iranian gas field they discovered some years ago but Iran hasn’t yet given its nod even after two years of negotiations.
