The Union Cabinet has approved the signing of a Memorandum of Understanding (MoU) between India and Israel on cooperation in the oil and gas sector. The signing of the MoU assumes importance as it comes close on the heels of Israel’s announcement of granting oil exploration license to a consortium led by ONGC Videsh (OVL) with Bharat PetroResources, Indian Oil and Oil India as other partners.
The MoU is expected to provide impetus to India - Israel ties in the energy sector. The cooperation envisaged under the agreement will facilitate promotion of investments in each other’s countries, technology transfer, R&D, conducting joint studies, capacity building of human resources and collaboration in the area of Start-ups.
Indian state firms’ decision to bid for Israeli fields came following a diplomatic push between the two countries to strengthen ties in various areas.
The Indian consortium and Greek firm Energean were the only bidders in the 1st Israeli Offshore Licensing Round that closed in November. The auction, launched in November 2016, was extended twice to attract more bidders. It offered 24 blocks with an estimated in-place reserve of 6.6 billion barrels of oil and 2,137 billion cubic meters of natural gas.
The winners would get an exploration license for three years, which can be extended by additional three years if the licensee has implemented the work plan and commits to carry out drilling during the extension period. A license holder has to deposit a guarantee of $2.5 million to $10 million, depending on the work program commitments.