CAIRN Energy has applied for oil and gas exploration licences off Israel after losing out in a bid battle for a portfolio containing significant Mediterranean elements.
The Israeli energy ministry announced that Edinburgh-based Cairn bid for acreage under a round it launched to try to encourage international firms to help the country make the most of its resources.
Cairn is set to team up with an exploration veteran who helped the company make its move into the big time for its push into Israel.
The company bid for licences off Israel’s Mediterranean coast with Soco International. Soco’s directors include Mike Watts, who was exploration chief at Cairn when the company made a series of bumper finds in India.
Read more: Cairn Energy thriving in North Sea as Indian judgement day approaches
Soco’s directors also include former Cairn chief financial officer Jann Brown.
Cairn made no comment on the announcement by the Israeli ministry, which said the arrival of additional European companies would boost competition in the industry. The country aims to transform itself into a regional energy power.
However, Cairn has signalled its belief in the exploration potential of the eastern Mediterranean since chief executive Simon Thomson took charge in 2011.
He has followed a strategy that involves combining potentially transformational exploration work in what are classed as frontier areas with lower risk activity in the North Sea.
Read more: BP reported to be eyeing Cairn acreage in Senegal
Cairn completed early stage work off Malta and Cyprus under Mr Thomson.
Earlier this month the company was reported to have made the final round of bidding for the oil and gas portfolio that Italy’s Edison decided to offload. The bulk of the assets in the Edison portfolio are in the Mediterranean and the Nile Delta. It also includes a stake in the bumper Glengorm find in the North Sea made by Edison with China’s CNOOC and Total of France in January.
Energean won the contest to buy the portfolio with an offer valuing the business at up to $850 million (£675m).
London-based Energean has also applied for acreage off Israel in the latest bidding round. It bid with Israel Opportunity.
The company has been working on the development of the huge Karish and Tanin fields off Israel, with first gas expected in 2021.
Read more: Energean buys into bumper North Sea discovery
Tanin and Karish were included in a series of discoveries made by America’s Noble Energy around the turn of the decade that encouraged hopes Israel could achieve energy self-sufficiency.
Noble expects to start production from the giant Leviathan field off Israel this year.
However, the latest licensing round failed to generate as much interest as champions of the Israeli oil and gas sector’s potential might have hoped.
Only two groups submitted bids, as was the case in the round held in 2017.
Energean and Israel Opportunity participated in the previous round.
Energy Minister Yuval Steinitz said in March that Brazil’s Petrobras was expected to take part in the tender, Reuters reported.
The agency reported in March that US super major ExxonMobil was considering bidding in the latest round.
The Israeli energy ministry said it will consider the latest bids in coming weeks.
Another round is due to be held in 2021.
Cairn and Soco bid with Israel’s Ratio Oil, which has a stake in Leviathan.
Mr Watts and Ms Brown left Cairn in 2014, three years after the company sold a controlling stake in its former Indian subsidiary to Vedanta Resources for $5.5 billion.
Read more: Bolt from the blue as dynamic duo step down at Cairn Energy
After founding the India-focused Magna Energy, they became co-heads of Soco’s business development function in 2017 with seats on the firm’s board. London-based Soco has operations in Vietnam and Egypt.
Cairn has expanded its exploration drive into a range of countries on Mr Thomson’s watch including Senegal. The company made a bumper find off Senegal in 2014, which it is preparing to bring into production.
It was awarded acreage off the central American state of Suriname last year.
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