IO Monthly Update - March 2017
Israel Opportunity's Latest Announcements
  • Israel Opportunity signs Term sheet for the acquisition of rights in oil fields in North Dakota
On March 7th, 2017, Israel Opportunity signed a Term sheet for the acquisition of rights of ten sections on a total area of approximately 6,400 acre in oil fields in North Dakota, USA, together with Cyprus Opportunity and an American oil company named Radian Partnership, LP. According to the Term sheet, Radian Partnership, Israel Opportunity and Cyprus Opportunity will acquire 75% of the rights owned by the current owners, at a total cost of $ 3.5 million, and the current owners of rights will keep 25%. The proposed purchase is conditional upon, inter alia, conducting satisfactory Due Diligence, execution of the purchase agreement, execution of contract operating agreement and receipt of all approvals of the competent organs of the parties.
Industry Updates
  • Plans for underwater gas pipeline from Israel to Europe advance
According to Reuters, in a meeting in Tel Aviv between energy ministers from Israel, Cyprus, Greece and Italy on April 3rd, 2017, the Israeli and European officials signed a joint declaration to promote construction of the world’s longest sub sea natural-gas pipeline, setting a target date of 2025 for completion. The planned 2,000 km deep-sea pipeline aims to link gas fields off the coasts of Israel and Cyprus with Greece and possibly Italy, at a cost of up to 6 billion euros. According to the project owners, IGI Poseidon, which is a joint venture between Greece's DEPA and Italian energy group Edison, a feasibility study has been completed and the next few years would focus on proper development activities, with a final investment decision expected by 2020.
Regulatory Developments
  • Government approval of the Plan for Promoting Marginal Fields
The plan for promoting development of marginal fields, submitted by the Minister of Energy, Dr. Yuval Steinitz, was approved by the Israeli Government on April 2nd, 2017. The plan includes a total investment of 100 million ILS in infrastructure, in order to allow small fields with marginal economic value to compete with larger, more profitable fields such as Tamar and Leviathan, thus encouraging competition and better gas prices for consumers. The plan includes, inter alia, construction of a joint infrastructure to facilitate the connection of the Karish-Tanin gas fields as well as other reservoirs to shore, substantial support in increasing the demand for natural gas, publication of emergency regulations designed to assure continuous natural gas supply to the Israeli economy and more.