Local
articles | 27 October 2015

Delek silent on licence renewal for Block 12

Israeli energy conglomerate Delek have clarified that they do not plan to drill another exploratory well within their Block 12 offshore concession until May 2016, when their licence is set to expire.

In a disclosure to the Tel Aviv stock exchange last week, Delek said its gas subsidiaries have postponed the schedule for an “additional test drilling well” in Block 12 from October 23 to May 23, 2016.

The date coincides with the expiry of the company’s licence.

In an emailed response to a Cyprus Mail query on Monday, the company clarified that the test drilling referred to an “exploration well obligation.”

Delek did not comment on another question as to whether, given this development, they intend to request a renewal of their Block 12 licence.

“The Block 12 Contractors (Noble, Delek Drilling and Avner) are in discussions with the government of Cyprus regarding the implementation of the proposed development plan for Aphrodite discovery that the Block 12 contractors have submitted to the government of Cyprus, and such plan would also address any issues relating to drilling timelines etc,” the response read.

From the reply it can be deduced that Delek are looking to amend their agreement with Cyprus, but details are sketchy.

“As for raising the stake in Block 12, as the Delek Group disclosed, it has entered discussions with Noble for a possible farm-in which is still subject to agreement between the parties and relevant corporate approvals as well as for the approval of the government of Cyprus.”

In their October 22 press release, Delek had said the Block 12 partners “are examining options for amending the Development plan as required under the Production Sharing Contract and conducting discussions with regard to the proposed outline for the development plan of the Aphrodite reservoir.”

The Aphrodite gas reservoir in Block 12 was declared commercial earlier this year.

In theirfull-year 2014 results, released in March, Delek characterised Aphrodite as a 4.5 trillion cubic feet (contingent and prospective) natural gas discovery.

At the time, Delek announced on behalf of their partners that the drafted, preliminary plan for Aphrodite included the establishment of an FPSO (floating production storage and offloading) vessel.

In August, operator Noble Energy announced that it was considering a plan that included gas exports to Egypt.

Noble operates the block with a 70% interest, in partnership with Delek subsidiaries Avner Oil Exploration and Delek Drilling (15% each).

Source: Cyprus Mail

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