Israel awards gas exploration licences to Eni, BP and four others

By Ari Rabinovitch and Steven Scheer

JERUSALEM (Reuters) -Israel's Energy Ministry said on Sunday it had awarded 12 licences to six companies to explore for natural gas off the country's Mediterranean coast, aiming to create more competition and diversify suppliers.

The licence awards, which came as the Israel-Hamas conflict entered its fourth week, included one group led by Italy's Eni along with Dana Petroleum and Israel's Ratio Energies which will explore in an area west of the massive Leviathan field, which supplies Israel with gas and is also used for export.

A second group, involving Azerbaijan's national oil company Socar along with BP and Israel's NewMed , will explore north of the Leviathan, the ministry said.

"The winning companies have committed to unprecedented investment in natural gas exploration over the next three years, which would hopefully result in the discovery of new natural gas reservoirs," Energy Minister Israel Katz said.

The licences will last for an initial three years, with the option to extend to up seven years, depending on progress.

This, the ministry said, will enable the licence holder to first study the area and only then decide whether to continue development.

Responding to a Reuters request for comment, an Eni spokesperson said on Monday that the bid round was launched in December and the Italian group submitted its offer in July.

"The company was awarded a licence in the country's southern offshore gas basin. Any technical considerations on the prospects and timing of the activities are obviously premature," the Eni spokesperson added.

A BP spokesperson confirmed that a Socar-led consortium was awarded the licence block.

Reuters reported in July that BP, Socar and NewMed had jointly taken part in the licensing tender.

Large gas deposits were discovered in the east Mediterranean over the past decade and a half, and Israel hopes more will be found to increase reserves and advance plans to export gas to Europe, which is looking for new energy sources.

Energean , which operates the Karish gas field off northern Israel, a major supplier of gas to the country, had also applied for a licence in the area north of Leviathan.

"Active, committed investors in a country at war should be respected and supported," Energean said in a statement.

(Additional reporting Francesca Landini in Milan, Ron Bousso in London; editing by Giles Elgood and Jason Neely)