IO Monthly Update - May + June 2016
Israel Opportunity's Latest Announcements
- The Partnership files a petition to the High Court of Justice
On June 19th, 2016, Israel Opportunity (the Partnership, together with the General Partner) filed a petition to the High Court of Justice, against, inter alia, the Petroleum Commissioner and Oil Council. The petition was submitted against the Petroleum Commissioner's decision not to discuss the Partnership's request to acquire 31.5% of the holdings in "Oz" License in the Oil Council, against the Commissioner's decision to accept the recommendation of the Oil Council to reject the General Partner's request to register, in accordance with the partnership agreement, a 10% Overriding Royalty Interest in favor of the General Partner and against the Commissioner's decision to extend the license validity only until December 19th, 2016.
- Israel-Turkey normalization deal signed
On June 27th, 2016, after six years of conflict, Israeli Prime Minister Benjamin Netanyahu and Turkish Prime Minister Binaldi Yildirim signed a reconciliation agreement. The agreement includes cooperation in the energy sector, whereby Israel and Turkey will begin formal talks to build a gas pipeline between the two countries through which Israel might sell its natural gas, with Turkish assistance, to Europe. According to Globes Magazine, executives in the Leviathan partnership said that the agreement will also likely lead to the signing of a gas export deal by the end of next year.
- A Solution Found for the Gas Framework
Following the High Court of Justice's ruling regarding the natural gas outline agreement on March 2016, Energy Minister Dr. Yuval Steinitz has reached an agreement with Delek and Noble Energy on revising the stability clause of the outline. Under this clause, the state promised 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. The new version, as approved by the Government on May 22nd, 2016, obviates the government’s obligation to oppose private legislation seeking to change policy relating to Israel’s offshore gas fields, and provides greater leeway for future government administrations to revise natural gas policy, should the need arise.
- Tamar partners to drill a new well
According to publications by the partners in Tamar Reservoir on July 3rd, 2016, an additional development and production drilling will be carried out in the reservoir, together with supporting infrastructure, at a total investment of $265 million. The Tamar 8 drilling is expected to begin in the fourth quarter of this year and to last four months, including connection to the production system. The drilling will take place about 100 kilometers west of Haifa, in water 1,670 meters deep, and to a planned final depth of 5,050 meters below sea level.
- Energy Ministry approves Leviathan development plan
According to publications by the partners in the Leviathan gas reservoir and Globes Magazine on June 2nd, 2016, the Petroleum Commissioner at the Ministry of National Infrastructures, Energy and Water Resources has approved Delek Drilling, Avner Oil & Gas, Noble Energy and Ratio's plan for development of Leviathan, submitted to him three months ago. Under the plan, the reservoir will be developed according to an accelerated timetable that enable the gas from it to reach Israeli users by the end of 2019, earlier than the date set in the gas framework agreement between the state and the gas exploration companies. The Leviathan partners aim to approve a final investment decision this year.
- Leviathan partners sign $3b gas deal
On May 29th, 2016, the partners in Leviathan natural gas reservoir announced the signing of a gas supply agreement with the IPM Company in Be'er Tuvia. The partnership will supply 13 BCM of gas to the power station slated for construction in the Be'er Tuvia industrial zone. The value of the 18-year agreement is estimated at $3 billion. According to Globes Magazine, The IPM power station is controlled by Triple M and Israel Power Management 3000. It is designed for construction on a 62-dunam (15.5-acre) site, and will produce 430 megawatts of electricity using combined cycle power technology (natural gas as the main fuel and diesel oil as a backup).
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