Petroleum Commissioner extends Ishai license until 2016: negotiations between Israel and Cyprus are underway and will include the Ishai licenseThe Aphrodite 2 well drilled at the Ishai license in November 2012 demonstrated that the gas field discovered at Cyprus’s Block 12 extends to a license located in Israel’s exclusive economic zone. Rony Halman, the Chairman of Israel Opportunity Energy Resources: There is a strong probability of discovering more oil and gas fields in the Levant Basin, which is why cooperation between Israel and Cyprus will revive interest in our region and allow both countries to export the gas that has been and will be discovered in their territories, strengthening both countries politically and economically.
“Negotiations between Israel and Cyprus on the signing of a framework agreement to consolidate joint development and production are underway and could include arrangements for distribution from the joint fields,” Petroleum Commissioner at the Ministry of National Resources Alexander Warshavsky informed the partners in the Ishai license, after notifying them that their license has been extended until 2016. In a notice to the Tel Aviv Stock Exchange (TASE) this morning, Israel Opportunity Energy Resources LP stated that an agreement between the two countries might include the Ishai license.
The Ishai license is one of the six offshore drilling licenses known as the Pelagic licenses, which cover an area of two million dunam (200,000 hectares) approximately 170 kilometers west of Haifa. They border the Gal and Ratio Yam licenses where the Leviathan structure and Noble Energy Inc.’s Block 12 in Cyprus are found. The Aphrodite 2 well drilled by the licensees in late 2012 found that the Aphrodite field discovered in Block 12, which has about five trillion cubic feet (TCF) of natural gas, partly extends to the area of the Ishai license.
The Ishai licensees are Nammax Oil and Gas Ltd. (42.5%), Frendum Investments Ltd. (33.5%), Israel Opportunity Energy Resources LP (10%), Daden Investment Ltd. (9%), and AGR Petroleum Services Holdings AS (5%).
According to the Petroleum Commissioner’s announcement, the agreement between Israel and Cyprus may include several clauses that will apply to licenses from both sides, and include clauses requiring two licensees to reach a unitization agreement, subject to conditions and in accordance with the timetable that will be set in the framework agreement that will be signed by Israel and Cyprus.
Rony Halman, the Chairman of Israel Opportunity Energy Resources, welcomed the pending agreement, saying, “There is a strong probability of discovering more oil and gas fields in the Levant Basin, which is why cooperation between Israel and Cyprus will restore interest in our region and allow both countries to export the gas that has been and will be discovered in their territories, strengthening both countries politically and economically.”
In the decision to extend the Ishai license until February 2016, the Petroleum Commissioner set a series of milestones that the licensees must meet:
1. Accept all the geological and geophysical material obtained from the area of Block 12 (Cyprus), pursuant to the exchange of information agreement between the Israeli and Cypriot governments, and sort, review, and load it for the work stations. Process the 3D seismic surveys from both sides of the exclusive economic zones’ border in order to fit the seismic characteristics, produce consolidated cubes, and transfer the cubes together with the data processing report to the Petroleum Commission. Deadline: 1 November 2014.
2. Jointly analyze and solve the geological and geophysical data from the Aphrodite structure located in the area of the license and Block 12, including detailed analysis of the findings of all the wells drilled in this structure, analyze the seismic horizons and fractures on both sides of the border, and produce time, depth, and thickness maps of the main signs. The results of the work will be described in the geological and geophysical summary report, which will include, among other things, the preliminary resources report for the Aphrodite structure that will be sent to the Petroleum Commissioner. Deadline: 15 December 2014.
3. Advanced processing of the 3D seismic data for the license and Block 12 for a quality assessment of the fields’ features. The first stage will include the processing, sorting, and loading of representative pre-stack migrated gathers files in order to prepare an AVO and seismic inversion analysis. If the results of the feasibility study are positive, the advanced data processing will be expanded to include 3D seismic surveys on both sides of the border. When the the processing is completed, the seismic cubes with the data processing report to the Petroleum Commission. Deadline: 1 March 2015.
4. Basin analysis of the area of the Aphrodite structure, including a geological and thermal history review of the basin and the conditions for the creation and movement of hydrocarbons using the backstripping method and all the existing geological and geophysical material. The results of the basin analysis will be summarized in a report that will be sent to the Petroleum Commissioner: Deadline: 1 March 2015.
5. Complete and update the findings in accordance with the advanced data processing and basin analysis, and prepare a final geological and geophysical report for the Aphrodite structure. The results will be described in the report, which will be sent to the Petroleum Commissioner. Deadline: 1 July 2015.
6. Prepare a final resources report for the Aphrodite structure on the basis of the petroleum resources management system (PRMS). Deadline: 1 September 2015.
7. Submit the conceptual development plan for the Aphrodite structure, including preliminary engineering planning and economic worthwhileness study for development of the field. The plan will be sent to the Petroleum Commissioner. Deadline: 1 December 2015.
