Edison International, the global arm of the Italian-based Edison energy group, signed a partnership agreement with Israel's Ratio Oil Exploration, Calcalist has learned. The agreement grants Edison a share in the drilling rights of the Gal license.
Ratio owns the full rights to the Gal license, located 150 kilometers (93 miles) off the coast of Netanya, near the Leviathan license.
Edison is also biding for partnership in the Leviathan group, which includes Delek Group, Ratio and Noble Energy.
Edison is the oldest and one of the major natural gas and crude oil exploration, production and distribution and electricity production and distribution corporations in Europe.
As part of the partnership agreement, Ratio and Edison will submit a renewed application to the Petroleum Supervisor for two licenses in the Gal field – Neta and Roi, which will be the operated by Edison International.
Under the terms of the agreement, in the first stage Edison will receive 20% of the license's rights with an option to increase its stake in the license by another 20% - to a total of 40%.
According to the agreement, Edison will cover Ratio's costs to date, as per its relative holding, and will shoulder an additional 5% of the costs of the initial drilling, up to a sum of $5 million.
Sources on the energy market estimate that the financing is aimed primarily to cover the 3D seismic survey carried out in the permit area. They also say that the partnership is a significant development in the Israeli gas market, which has been left out of the international arena ever since British Gas bailed out a decade ago, with only one international player left – "American Noble, which is an excellent operator but was a single player," one source explains.
Estimates are that the Gal field prospecting might encroach on Egypt's exclusive economic zone, which means Edison brings an advantage to the partnership, being a partner in Egyptian General Petroleum Corporation's Abu Qir well and British Gas' field in the Nile delta.
It appears that the partnership between Ratio and Edison will extend beyond the Gal license, and the parties will further cooperate in other oil and gas assets in the area.
This report was originally published in Hebrew