Exxon eyes Israel after Cyprus win
National Infrastructure, Energy and Water Minister Yuval Steinitz met last week with senior executives from Exxon Mobil and Royal Dutch Shell during his visit to the US. The minister’s associates say that while Royal Dutch Shell will probably not take part in the new tender for oil and gas exploration licenses in Israeli waters, the Exxon Mobil executives came equipped with a great deal of relevant information, and expressed interest in the tender.
The reason is allegedly the announcement two days ago that Exxon had won a tender for oil and gas exploration in Block 10 in Cyprus as part of a consortium with Qatar Petroleum. A group composed of Italian company ENI and Total, and ENI by itself, won the concession for two other blocks in the tender.
In a fourth block already held by Total, the company asked the Cypriot government for permission to add ENI as a 50% partner in the license, because the block is located only six kilometers away from the Egyptian Zohr gas reservoir discovered by ENI. Total expects ENI’s extensive knowledge of the geology in the area to be of use in finding gas in Cyprus.
Steinitz’s associates say that since Exxon is starting to prepare for activity in a nearby area, the company believes that it is likely to prove worthwhile to develop parallel activity in Israel, and to use the same transportation infrastructure to export gas discovered in both countries to Europe.
Steine=itz went to Europe early this week, and flew from there to New York and Houston for a week of meetings with energy and finance officials. In Rome, he met with his Italian counterpart, and held meetings in New York with Barclays, Morgan Stanley, Goldman Sachs, and JP Morgan investments banks, as well as with a group of private investors organized by the Royal Bank of Canada (RBC). In Houston, he took part in the CERAweek energy conference, and held meetings with energy companies.
Steinitz said, “I was surprised to see energy ministers and representatives of energy companies from all over the world congratulate us on the beginning of development in Leviathan, after years of delay. Almost everyone had assumed that Leviathan was a lost cause... especially given the global crisis in investments in oil and gas fields and the fact that some of the deep water projects of the Leviathan type have been canceled or postponed in various places around the world.
“In meetings with some of the world’s largest investment banks, they noted the change in Israel’s image in the energy market, from a place to be avoided into a responsible country attractive for energy investments in general, and private gas in particular. The plans we displayed for building an undersea pipeline to Turkey, and from Israel and Cyprus to Greece and Italy, aroused a surprising degree of interest,” he added,