IO Monthly Update - March 2016
Israel Opportunity's Latest Announcements
- Petroleum Commissioner extends "Oz" License
On March 15th, 2016, the Petroleum Commissioner has extended the validity of "Oz" License until December 19th, 2016. The extension is subject to a change in the license's work program, inter alia the submission of an environmental survey according to the guidelines of the Ministry of National Infrastructures, Energy and Water Resources by August 20th, 2016, and a signed contract with a drilling contractor by October 15th, 2016.
- Israel's High Court rules against the stability clause of the gas outline agreement
On March 27th, 2016, Israel's High Court of Justice announced its ruling regarding the natural gas outline agreement. The court has expressed its discontent with the stability clause, the most controversial section of the agreement. Under this clause, the state promises to make no substantial regulatory changes in the gas industry in the next 10 years, in particular in taxation, exports and ownership of the fields. In their ruling, the High Court of Justice judges wrote, "The stability clause has been set without authority and its legality is repealed. This is because it has been passed in contradiction to the basic rules of administrative law in a way that prohibits restricting the considerations of the (Antitrust) Authority." The court has, in practice, approved all other sections of the agreement but gave the government and gas companies one year to consolidate an alternative.
- Gas sales from Leviathan to Gaza
According to Globes Magazine, negotiations between Israel and the Palestinian Authority, led by the Quartet on the Middle East, have taken place in recent weeks for the supply of gas from the Leviathan reservoir to the Gaza Strip power station. The Israel Security Cabinet has agreed in principle to the measure, and the Ministry of National Infrastructure, Energy and Water Resources authorized the sale of0.25-0.4 BCM a year. The Quartet announced that it was willing to pay for a gas pipeline to be laid by Israel up to the border.
- Eni succeeds with the first production test of Zohr field
On March 10th, 2016 Eni announced it successfully performed the production test of Zohr 2X, first appraisal well of Zohr discovery, in the Shorouk block, offshore Egypt. During the test, 120m of the reservoir were opened to production. The well, constrained by surface facilities, delivered up to 44 million standard cubic feet of gas per day (MMscfd). The comprehensive set of data collected and analyzed has proved that the well has a great production capacity, which is estimated in a deliverability of up to 250 MMScfd in production configuration (about 46 thousand barrel of oil equivalent per day).
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