The
likelihood of Israeli companies winning gas exploration licenses in Cypriot
waters has improved after a range of large international companies decided not
to bid for block tenders. In February, the Cypriot government published tenders
for 12 blocks of offshore licenses.
Sources inform
"Globes" that a range of international companies, including Russian,
Chinese and French companies, have decided not to compete in the bid following
diplomatic pressure from Turkey. The attractiveness of the blocks has also
suffered from the relatively disappointing results from the Block 12 drilling -
the only license so far issued - where lower than expected quantities of gas
were found.
The fact that some large companies are staying away improves
the chances of Israeli companies that are planning to bid. Israeli companies
enjoy an advantage because the areas being searched are close to the Levantine
basin where the Israeli licenses are located. Consequently, they already have
information about the geological layers to be drilled.
Sources inform "Globes" that one of the leading
Israeli bidders is Ofer Nimrodi, controlling shareholder in Israel Land
Development Energy Company Ltd. (TASE: IE), which holds a stake in the Myra and
Sarah licenses. Nimrodi recently met with senior figures in the Cypriot
government, although so far as is known Nimrodi is yet to bring an
international drilling operator on board. Other Israeli companies whose names have
yet to be published includeDor Alon Energy in Israel (1988) Ltd.(TASE:DRAL) unit Alon Natural
Gas Exploration, which holds 4% of the Tamar license, and Epsilon Sigma, a
partner in the Dalia Energy private power station. Other groups likely to bid
are Isramco Ltd. (Nasdaq:ISRL; TASE:ISRA.L), Modiin Energy LP (TASE:MDIN.L), andATP Oil & Gas Corporation(Nasdaq: ATPG), which may try to form
a consortium withIsrael Electric Corporation(IEC) (TASE:ELEC.B22).Delek Group Ltd.(TASE:DLEKG), which holds 30%
of the Cypriot Block 12 license has yet to decide whether to bid.
Antagonizing the Turks especially bothers the Russians, who
fear that Turkey will promote the Naboco project to bring gas from central Asia
to Europe and compete with Russian gas. Turkey is also an important market
itself for Gazprom, and buys some 30 billion cubic meters of gas per year from
the Russian national company. The Chinese government has also ordered companies
not to take part in tenders.