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The Black Sea and East Mediterranean – licensing round and tender guide

The Black Sea and East Mediterranean have been threatening to take centre stage in the oil and gas world for a long time now. Huge fields like Leviathan off the coast of Israel and Romania’s Black Sea acreage have no shortage of willing investors, and recent development mean the region could be about to fulfil its potential. Here is a look at the area country-by-country – rounding up the latest developments, and showing where the opportunities lie.

 

Greece

Licensing rounds

Greece is home to the region’s main licensing action – 20 blocks are available in the country’s second international licensing round for blocks in the Ionian and Mediterranean seas. Three bids have been received so far, but the Greek government has not revealed who they are. The 20 blocks are each over 550 square miles, and the tender deadline was 14 July. Greek Prime Minister Tsipras has refused to extend this, but the deadline has already been moved back once – and Greece’s financial situation means oil and gas exploration could have a huge part to play in the coming years.

Greece also awarded three new concessions to explore in May. Two were taken by national operator Energean, and the third by a consortium of Hellenic Petroleum, Edison from Italy, and Petroceltic from Ireland.

Tender opportunities

Greece will be a hotbed for pipeline construction – the Trans-Adriatic Pipeline will run through its northern territory. There is also a pre-qualification tender out to supply gas compressors in Greece and Albania.

Other opportunities

LNG could also provide opportunities. Greek shipowner Chandris ordered a second specialised carrier from South Korean shipbuilder DSME last month, exercising the option it took when placing the first order last December.

 

Albania

Licensing rounds

Albania offered seven onshore and offshore blocks in May this year on five-year exploration terms, around central and southern Albania. San Leon Energy is currently raising funds for exploratory drilling at its Durresi offshore block, which the Irish company hopes will begin this autumn.

Tender opportunities

A pre-qualification tender for EPCI works on the Trans-Adriatic Pipeline’s offshore section between Albania and Italy is on offer, for a 105 km stretch of 36 inch pipeline. The tender also includes landfall civil works in Albania.

Other opportunities

As the work on TAP continues, Albania will offer many more opportunities for oil and gas firms right across the supply chain.

 

Egypt

Licensing rounds

The Egyptian government offered 15 offshore Mediterranean blocks in a major bid round that closed at the end of July 2015. Interest was high in the wake of Eni’s July find – the Italian producers discovered an estimated 15bcm of gas in the Abu Madi West area it secured in Egypt’s 2013 bid round. Production should begin sometime in autumn 2015.

As of the beginning of August, five concessions have been awarded, which Oil Review Africa expects to attract investment of at least $100 million.

Other opportunities

LNG is a big part of the energy mix in Egypt, and the country’s energy ministry is currently looking to secure long-term contracts for LNG cargoes, in addition to the one signed with Russia earlier this year.

 

Bulgaria

Licensing rounds

Bulgaria re-launched licensing rounds for the Black Sea Silistar and Teres blocks, its last unclaimed offshore acreage, in April this year. Bids are being accepted until September 21st for five-year exploration terms, and Noble Energy and ExxonMobil are among those interested.

Tender opportunities

EU cash is coming to Bulgaria. The European Commission approved a €150 million package on July 14 that will fund expansion of the Chiren gas storage facility.  

In pipeline news, the Bulgarian and Romanian governments launched a joint tender for the last remaining work on the delayed Interconnector Greece Bulgaria in March this year. The work is due to be completed by September.

 

Ukraine, Crimea and Russia

Tender opportunities

Ukraine and Russia are trying to keep the other’s involvement in their oil and gas sectors to a minimum, and this continues to drive most of the developments in their areas of the Black Sea. Most recently, Ukraine has been making noises about starting LNG imports, which would bring contracts and supply opportunities. Russia is still looking for contractors for its Turkish Stream project, having given Saipem its marching orders earlier this year.

 

 

Romania

Licensing rounds

All of Romania’s Black Sea blocks have been licensed, and Romania has probably made the most progress in the area so far, most recently in October last year, when ExxonMobil and Romanian national company OMV Petrom drilled the Pelican South-1 well.

 

Lebanon

Licensing rounds

Lebanon’s oil and gas licensing round – with 52 companies showing interest – has got stuck on its way through the Lebanese parliament. As the offshore blocks have not been officially marked out, companies are unable to submit bids, even though the round has been open since 2013. Once the blocks are delineated (which requires the Lebanese cabinet to approve two decrees from the country’s Ministry of Energy), Lebanon Gas News expects a six-month bidding period before producers can get involved.

Other opportunities

New legislation is being worked on to improve Lebanon’s tax policy regarding oil and gas exploration. This is expected to pass through parliament this year.

 

Israel

Field development

There are no new licensing opportunities in Israel to report, and this is unlikely to change while the country’s plan to develop Leviathan continues to spark arguments in the Israeli parliament. A vote on the practicalities of developing the field – including ensuring that Noble Energy and Delek Group, its partners, start production on time – has been delayed yet again by the government. Antitrust issues and gas pricing are the main sticking points.

 

Cyprus

Licensing rounds

Noble Energy and Israel’s Delek have declared that Block 12 to the south of Cyprus – containing the Aphrodite field – is commercially viable, announcing that it could produce 8 bcm per year. The recent development and production plan for the field mentions a floating production, storage and offloading vessel, and a decision is imminent on the long-discussed Cyprus-Egypt pipeline.

Cyprus’s last oil and gas bidding round took place in 2012. After a response that the government said was ‘beyond expectations’, 12 blocks to the south of the island went under the hammer. Four blocks were awarded to various consortia, with Eni, Kogas, Total and Novatek all involved. Results of drilling at the blocks were mixed – Eni’s two exploration wells in Block 9 were dusters – but Noble and Delek’s optimism shows the next few years could be productive ones for Cypriot oil and gas.

 

Other opportunities

In other areas, Cyprus is another nation looking towards LNG imports in the short term. The government is at late-stage negotiations with a number of bidders over an LNG supply deal – a decision should be made by the end of August.

 

Want to get the latest licensing and bid information first-hand? The Global Oil&Gas: Black Sea and East Mediterranean event is the place to get it – NOCs and government speakers from Greece, Turkey, Albania, Cyprus, Georgia, Crimea, Lebanon, Egypt and Libya will be speaking about the latest developments in their countries and the area as a whole. To find out more or to talk to the team about taking part, visit the event’s website.


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