Exxon Eyes Israel Gas Bid in Major Middle East Shift
Exxon Mobil is looking to become the first major oil company to move into Israel, despite the risk of worsening relations with other Middle Eastern countries.
(Reuters) Exxon Mobil Corp is considering exploring for oil and gas in Israel, said a person with direct knowledge of the matter, in what would make Exxon the first oil major to operate in the country still technically at war with Gulf Arab states.
A number of large gas discoveries offshore Israel and in nearby eastern Mediterranean waters in the last decade have made Israel a potentially lucrative prospect for big energy firms. The region is emerging as a new hot spot for gas exploration and production.
Until those discoveries, Israel was believed to be sitting on scant oil and gas reserves. There was little reason for energy firms to explore for energy in Israel and risk complicating operations and future investments in nearby Arab countries that hold some of the world’s largest energy reserves.
Exxon executives held talks with Israeli Energy Minister Yuval Steinitz in Houston this week about bidding for the right to explore and pump oil from offshore blocks in an auction that Israel will hold in June, said the person with direct knowledge.
Exxon, the world’s largest publicly traded oil company, recently acquired a $50,000 data package from the Israeli energy ministry for the auction, the person said.
An Exxon team also visited a data center set up by the ministry in Jerusalem, the source said. That center holds detailed information about the geology of the sub-sea rocks, believed to hold up to 75 trillion cubic feet of gas and 6.6 billion barrels of oil, according to estimates.
Exxon declined comment. Israel’s energy ministry declined comment.
In February, Exxon announced a major gas discovery in Cyprus together with its partner Qatar Petroleum. That field is near two other huge gas finds in the region: Leviathan off Israel and Zohr off Egypt.
The U.S. major and competitors such as Royal Dutch Shell and France’s Total have avoided investing in Israel, for fear of souring relationships with the governments of giant regional oil and gas producers such as Saudi Arabia, Kuwait and Iraq. Those countries do not recognize Israel.
Exxon is one of the biggest foreign investors in Qatar. It also has refining and petrochemical operations in Saudi Arabia, and produces oil and gas in Iraq and the United Arab Emirates.
President Donald Trump has angered the Arab world and stoked international concern with changes to U.S. policy in the region, including moving the U.S. Embassy to Jerusalem from Tel Aviv.
On Tuesday, U.S. Secretary of State Mike Pompeo urged oil and gas companies to use their clout in world markets to advance the Trump administration’s foreign policy agenda. That included helping the administration’s efforts to isolate Israel’s arch-enemy Iran, and Venezuela.