Following a meeting between India’s Minister of State for Petroleum and Natural Gas, Dharmendra Pradhan, and his Israeli counterpart, Yuval Steinitz, the anticipated bidding of Indian companies for natural gas and oil licenses in Israel appears to be underway, as reported by Ynet. Israel recently issued tenders for drilling 24 blocs of 400 square kilometers last November, but extended the deadline to July because of lack of participation. In spite of concerns about the security, the geopolitical situation and Israel’s tight regulations, there seems to be a green light for India and Turkey and possibly Cyprus and Greece to participate in various energy deals with Israel.
There was considerable disappointment last fall when there was only one response to the initial tender offer. Skeptics cited competing deals, such as the agreements made between the Cypriot government with ENI and Exxon and disputes with Lebanon over the ownership of three blocks as possible reasons for the failure of the tender offer. In addition, some were concerned that military conflicts, the low price of natural gas at $50 a barrel, the discouragement of companies that operate in the region to do business with Israel and Israel’s tough regulations as headwinds that threatened to seriously impede Israel’s tender offer.
Following the historic visit of Indian Prime Minister Narendra Modi to Israel, a number of lucrative trade deals were discussed, and the visit was hailed as a success. The meeting between Pradhan and Steinitz at the World Petroleum Congress has consolidated progress made between the two countries. Steinitz expressed optimism and feels that there may be three or four Indian companies that will take part in the deal. It is estimated that the Levant Basin has 75 billion TCF of natural gas yet to be found and 6.6 BBL of oil. Israel’s proven reserves are more than 35 billion TCF.
Israel isn’t the only country in the Middle East that Indian companies have set their sights on.
Indian energy company ONGC Videsh is bidding in an auction for offshore exploration and production licenses in Lebanon, as reported by Reuters. Pradhan revealed this plan in a tweet he made during the World Petroleum Congress meetings. Three of these blocs border with Israel. Negotiations for a deal with Lebanon were postponed because Lebanon was in the process of organizing a new government.
Although there was some pessimism that a deal could be made with Turkey following a speech made by President Erdogan earlier in the year that was critical of Israel, it seems that progress has been made between the two countries regarding the tender offer. Turkish Minister of Energy and National Resources Berat Albayrak and Yuvan Steinitz have agreed to a meeting regarding a potential natural gas deal.
The two also met at the World Petroleum Congress and discussed a possible framework for a pipeline that would connect Israel and Turkey.
The framework is required as a hedge against volatile relations between the two countries. Turkey may be motivated to make a pipeline deal with Israel because of the dramatic rise in natural gas consumption in Turkey and the desire to decrease its dependence on Russia. Steinitz says he expects Albayrak to visit Israel to help design a framework for the deal.
In addition to hopeful signs from India and Turkey, Israel may be headed toward a successful negotiation with Greece and Cyprus for a 2,000 kilometer East-Med pipeline that would deliver fuel from reserves in Israel and Cyprus to Europe. In June, Benjamin Netanyahu, Greek Prime Minister Alexis Tsipras and Cyprus President Nicos Anastasiades discussed a potential $6 billion pipeline project with the participation of the three countries.