The Ministry of National Infrastructures has ordered the Leviathan partners to expedite drilling of the exploration well. A similar order was sent to the holders of the nearly Alon and Ruth licenses, and the Pelagic license holders.
"Under the ministry policy to improve supervision of the natural gas and oil exploration rights in Israel's waters, it has been decided to require the companies to drill exploratory wells according to shorter timetables than the previous norm. In addition, rights granted from the force of a prior permit and which permission was previously given not to develop simultaneously, the rights holders will now be required carry out drilling within a defined timetable, regardless of the other rights given from the force of the same prior permit," states the ministry.
The Ministry of National Infrastructures has said that the objective of the directive was to expedite the drilling of exploratory wells at each license. It said that it has cancelled the prior practice to allow the option of sequential drilling by a single rig at a bloc of licenses. The directive reflects the ministry's policy regarding each right individually, regardless whether it was held by the same rights holders.
Noble Energy Inc. (NYSE: NBL) owns 39.66% of Leviathan, Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 22.67% and Ratio Oil Exploration (1992) LP (TASE:RATI.L) owns 15%. The Leviathan structure holds an estimated 16 trillion cubic feet of gas, and the partners are currently drilling an exploratory well.
The rights to the Alon and Ruth licenses are due to expire on 15 December 2011, and 29 February, 2012. Delek, Noble Energy and Israel Land Development Company Energy Ltd. (TASE: IE) own the licenses. The six licenses held by Pelagic Exploration Company, located near Leviathan along the border of Israel and Cyprus's exclusive economic zones, have been acquired by Israel Opportunity Energy Resources LP (TASE: ISOP.L).
The Ministry of National Infrastructures will allow the license holders to apply for extensions to their licenses no later than one month before their expiration. The extension applications must include an updated work plan for drilling a well within 18 months of the extension date. The Petroleum Supervisor will review each application. Failure to meet the timetable and work plan is liable to result in revocation of the license.
Published by Globes [online], Israel business news - www.globes-online.com - on October 26, 2011
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