Q & A for the 2nd bid round

​​

To submit questions as per the competitive process, one has to be registered for the additional data page, and submit the questions using the designated format which appears at the end of the bid documents in MS Word format. 


Below is a table that includes questions submitted to the Ministry as part of the 2nd offshore bid round 2018, and the answers to them. 

No.

Document

(CFB/Schedule)

Item

No.

Query Answer/Clarification
1Schedule 1.5- Confidentiality Undertaking GeneralCould the Ministry please confirm that it has all necessary rights and permissions to provide the contents of the Data Package, and that all necessary consents, including export permissions, have been obtained to permit disclosure and provision of electronic and physical copies of the Data Package to potential bidders?Yes, the Ministry confirms that it has all necessary rights and permissions to provide the contents of the Data Package, and that all necessary consents, including export permissions, have been obtained to permit disclosure and provision of electronic and physical copies of the Data Package to potential bidders.
2Schedule 1.5- Confidentiality Undertaking Paragraph 1​ Could the Ministry of Energy please confirm that where a Receiving Party generates internal evaluation materials and other work products that do not display or incorporate the Confidential Information in original or reprocessed form, that these are not to be considered part of the Confidential Information?Yes, the Ministry confirms that where a Receiving Party generates internal evaluation materials and other work products that do not display or incorporate the Confidential Information in original or reprocessed form, these are not to be considered part of the Confidential Information.
3Schedule 1.5- Confidentiality Undertaking GeneralCould the Ministry please confirm that the Receiving Party has the right to reprocess Confidential Information, including by way of use of a third party reprocessing company (still subject to confidentiality and the Permitted Purpose) ?Yes, the Ministry confirms that the Receiving Party has the right to reprocess Confidential Information, including by way of use of a third party reprocessing company as long as the Receiving Party will require from the third party reprocessing company to abide by a confidentiality undertaking concerning the Permitted Purpose
4Schedule 1.5- Confidentiality Undertakingparagraph 2.2Could the Ministry please confirm that "personnel" in paragraph 2.2 of the CU is understood to include employees of the Receiving Party, and also those of affiliated companies who have a need to review the Confidential Information for the Permitted Purpose?

Yes, the Ministry confirms that "personnel" in paragraph 2.2 of the Confidentiality Undertaking is understood to include employees of the Receiving Party, and also those of affiliated companies who have a need to review the Confidential Information for the Permitted Purpose.

" Affiliated company " means any company or legal entity that:

(a)          controls either directly or indirectly the Receiving Party; or

(b)          which is controlled directly or indirectly by the Receiving Party; or

and, for these purposes, "control" means the right to exercise fifty percent (50%) or more of the voting rights of such company or entity.

5Schedule 1.5- Confidentiality Undertaking Paragraph 2Could the Ministry pleaseconfirm that the Receiving Party shall be entitled (on prior notice to the Ministry) to disclose Confidential Information as required by law, Court order, SEC or other quasi-governmental regulation, etc?Yes, the Ministry confirms that the Receiving Party shall be entitled (on prior notice to the Ministry, in writing) to disclose Confidential Information as required by law, Court order, SEC or other quasi-governmental regulation, etc.
6Schedule 1.5- Confidentiality Undertaking Paragraph 2Could the Ministry please confirm that the Receiving Party has the ability to provide the Confidential Information to potential joint bidders, who have also signed up to a Confidentiality Undertaking, and discuss their respective evaluations of the Confidential Information?Yes, the Ministry confirms that the Receiving Party has the ability to provide the Confidential Information to potential joint bidders, who have also signed up to a Confidentiality Undertaking, and discuss their respective evaluations of the Confidential Information.
7Schedule 1.5- Confidentiality Undertaking

 Paragraph 2.2

 

 

 

 

 

 

Could the Ministry please confirm that the Receiving Party has the ability to disclose information to external professional consultants, consistent with the Permitted Purpose?Yes, the Ministry confirms that the Receiving Party has the ability to disclose information to external professional consultants, as long as the Receiving Party will require from the external professional consultants to abide by a confidentiality undertaking concerning the Permitted Purpose
8Schedule 1.5- Confidentiality Undertaking GeneralCould the Ministry please confirm the terms on which Confidential Information should be returned or destroyed on cessation of the Permitted Purpose?While the use of the Data is limited to the Permitted Purpose, the Ministry has no requirements concerning which Confidential Information should be returned or destroyed on cessation of the Permitted Purpose. As specified in Section 2.7 of the Confidentiality Undertaking, the Receiving Party's undertaking shall not be restricted in time.
9Schedule 1.5- Confidentiality Undertaking GeneralCould the Ministry please confirm that if a Receiving Party is successful in obtaining acreage in the round, that it may retain and use the Confidential Information for the purposes of its continuing activities with respect to such acreage without further payments becoming due?Yes, the Ministry confirms that if a Receiving Party is successful in obtaining acreage in the round, it may retain and use the Confidential Information for the purposes of its continuing activities with respect to such acreage without further payments becoming due.
10CFB

8.6 - Data package

 

Could the Ministry please confirm the terms on which the further data, not contained within the Data Package, will be made available?Any further Data, not contained within the Data Package, is available subject the signing of an addendum to the Confidentiality Undertaking that will apply the terms of the Confidentiality Undertaking concerning the further Data, mutatis mutandis, as well as the completion of the payment arrangements relating to receiving the further Data, as required. For further details, please contact Mr. Shachaf Lippman at shachafl@energy.gov.il
​111.5 Confidentiality UndertakingParagraph 1Could the Ministry please confirm that an affiliated company of the Receiving Party (rather than the Receiving Party itself) can participate as a potential bidder in the 2nd Offshore Bidding Round 2018?​Yes, the Ministry confirms that an affiliated company of the Receiving Party can participate as a potential bidder in the 2nd Offshore Bidding Round 2018, according to the terms specified in the Petroleum Regulations (Principles for Offshore Petroleum Exploration and Production) 5777-2016
​12​​ 1.5 Confidentiality Undertaking Paragraph 2.1Could the Ministry please confirm that the Receiving Party has the ability to disclose Confidential Information to its shareholders if such disclosure is required for making decisions in respect of the Permitted Purpose? ​Yes, the Ministry confirms that "personnel" in paragraph 2.2 of the Confidentiality Undertaking is understood to include any affiliate of the Receiving Party, who has a need to review the Confidential Information for the Permitted Purpose.

For the purpose of this clarification alone:

"Affiliated company" means any company or legal entity that:

(a) controls either directly or indirectly the Receiving Party; or

)b) is controlled directly or indirectly by the Receiving Party.

For these purposes, "control" means the right to exercise fifty percent (50%) or more of the voting rights of such company or entity.

​13 1.5 Confidentiality Undertaking Paragraph 2.7 Could the Ministry please confirm that the Confidentiality Undertaking will terminate and be superseded by an Exploration and Production Concession Contract (once one is signed between a potential bidder and the Ministry)? ​The Ministry clarifies that:

(a)the commitment by a receiving party as specified in the Confidentiality Undertaking is not limited in time and shall also be valid after the license has been granted;

(b) if a Receiving Party is successful in obtaining acreage in the round, it may retain and use the Confidential Information, in such ways which are specified in the Confidentiality Undertaking, for the purposes of its continuing activities with respect to such acreage.​

​14
​Referring to the document of the

Ministry of Energy on economy & fiscal

system of oil & gas, there is no

reference regarding the treatment of

decommissioning costs.

Unless we have missed where this is

detailed, please could you help us

understand better the mechanism=s

relevant to the decommissioning cost

& schedule including allocation

principle between owner and the

Government (if any) ?


​To this date, the Ministry has not issued formal guidelines regarding decommissioning of offshore facilities. Certain lease deeds in effect at this time reflect the current approach (see extract below), and you should consider this to reflect the Ministry's current policy. 

 

The Ministry's policy towards decommissioning may be revised or updated in the future but in any event you should expect it to call for (i) the submission of a decommissioning plan well in advance of the anticipated requirement or end of lease and the Ministry's right to require a plan in line with acceptable international standards, and (ii) the funding of the decommissioning obligation  by deposits into a fund with the amounts and timing of deposits being determined by reference to the approved decommissioning plan.  The Ministry may determine that certain facilities should be handed over to a new operator rather than decommissioned and the terms for any such transfer would be reflected in the approved decommissioning plan.

 

For the avoidance of doubt, the leaseholder is responsible for decommissioning, including costs of decommissioning and the payment of all amounts into a decommissioning fund on a timely basis.

The following clause follows the approach for decommissioning in certain existing, active leases:

 

"No later than the date on which  the balance of 2P reserves in _____ Field under the latest resources evaluation report, will be less than ______ BCM, the Lease Holder will submit for the approval of the Commissioner a detailed plan for dismantling the Facilities (hereinafter: the "Decommissioning Plan").  In the event that the Lease Holder fails to submit the Decommissioning Plan in due time or the Commissioner finds that the Decommissioning Plan is not worthy of approval, and the Commissioner and Lease Holder do not reach an agreement regarding the Decommissioning Plan, the Commissioner shall determine such Decommissioning Plan in line with acceptable international standards.

Upon the approval of the Decommissioning Plan by the Commissioner, the Commissioner will determine a plan for the Lease Holder according to which the Lease Holder provides a security or deposits amounts into an "Decommissioning fund", on such dates, form and accumulation method to be determined by the Commissioner for securing appropriate means for the Lease Holder to execute the Decommissioning Plan.

The provisions of sections __ and ___ shall not derogate from the powers of the Commissioner to purchase, at the expiry of the Lease, facilities erected by the Lease Holder, and all under the provisions of section 61 of the Law."

​15
​Could you please provide with a proxy

or a range (or a study) related to gas

sales price in Israel (internal market

and /or export price signal) ?


​The Natural Gas Authority publishes on a quarterly basis the average weighted price of prices paid for natural gas in respect of consumers in the electricity sector related to productive leases, and average weighted price.  This information, in Hebrew, can be found at: https://www.gov.il/he/departments/general/decision476. The specific current file as published on that page being: https://www.gov.il/BlobFolder/generalpage/decision476/he/NGPrice22019.pdf

You are encouraged to review this information in its entirety. For the avoidance of doubt, the Ministry, cannot commit to any future price.


​16
​Schedule 1.5- Confidentiality Undertaking
​General
​Could the Ministry please confirm that the Receiving Party has the right to disclose confidential information to a bona fide purchaser in case of a future farm-out.
​Yes, the Ministry confirms that the Receiving Party has the ability to provide the Confidential Information to a company that is engaging in a farm out negotiation with the Receiving Party.  The Receiving Party would require such company to enter into a confidentiality undertaking with terms no less rigorous than the Confidentiality Undertaking.
​17
​Schedule 1.5- Confidentiality Undertaking
​General
​Could the Ministry as the Disclosing Party please confirm that it has the authority to provide prior written consent that Receiving Party may disclose Confidential Information when Receiving Party request such a disclosure.
​Yes. The Ministry, as the Disclosing Party, has the authority to provide written consent that Receiving Party may disclose Confidential Information when Receiving Party request such a disclosure.
​18
​Schedules 1.1 (contact details), 1.2 (ownership details) and 1.4 (constitutional documents)
​The Schedules 1.1 (contact details), 1.2 (ownership details) and 1.4 (constitutional documents) requests information about the prospective bidder.

Could you please clarify when this information has to be submitted?


​Schedules 1.1 (contact details), 1.2 (ownership details) and 1.4 (constitutional documents) should be submitted as part of the bid. Please see Article 2.11 (amended)
​19
​Schedule 4
​Could you please confirm the Schedule 4 forms need to be submitted only in case a company intends to be operator.
​Yes, the Ministry confirms that the Schedule 4 forms need to be submitted only in case a company intends to be operator.
​20
​Are there any PVT Analysis Reports of

offshore gas fields available?


​All available data related to the released wells is included in the data package.
​21
​Was it observed any HP/HT (High

Pressure / High Temperature) reservoir in the offshore gas fields?

​No HP/HT conditions were observed in any of the offshore gas fields.

All available pressure and temperature data related to the released wells is included in the data package.


​22
​Are there any available data about

Reservoirs Temperature, Formation Test and Geohazards (if exist) in the offshore gas fields?

​All available data related to the released wells is included in the data package.
​23
​Can you provide us a description of existing offshore/onshore infrastructure to receive production of new discoveries?
​In this map you can find a description of the offshore infrastructures:

http://www.energy-sea.gov.il/English-Site/Pages/Oil%20And%20Gas%20in%20Israel/History-of-Oil--Gas-Exploration-and-Production-in-Israel.aspx

and in this map you can find a description of the onshore infrastructures:

http://www.energy-sea.gov.il/English-Site/Pages/Oil%20And%20Gas%20in%20Israel/Downstream-Infrastructure.aspx

in addition to the current infrastructures the government, through the governmental distribution company (INGL) established an 10 KM transmission pipeline that can transmit 12 BCM/Y.


​24
​Can you give us an idea about operational costs of onshore processing plants?
​The operating costs for an onshore processing plant will likely depend upon the particular design of, and operations and maintenance approach for, the facility.  Accordingly, we are not in a position to provide any specific guidance in this area.  Possibly, you may be able to obtain some insights from the public filings of companies that have built onshore processing facilities in Israel and that report publicly.
​25

​Considering the huge amount of gas discoveries in Leviathan and Tamar, does

Israel still have potential to absorb new gas discoveries?

​The Ministry's non-binding estimate concerning Israel's domestic and export potential can be found in the OBR website in these links:

http://www.energy-sea.gov.il/English-Site/Pages/Gas%20Markets/Natural-Gas-Domestic-Demand-.aspx

http://www.energy-sea.gov.il/English-Site/Pages/Gas%20Markets/Israels-Export-Options.aspx

​26
​All the value of investments and

operational costs can be deducted from taxable income?

​We refer you to the Income Tax Ordinance and to the Natural Resources Profits Taxation Law, 2011  (Hebrew)
​27
​What is "Depreciation Rates for

Exploration and Production Development Investments"?

​We refer you to the Income Tax Ordinance and to the Natural Resources Profits Taxation Law, 2011 (Hebrew)
​28
​Is there monetary correction to the

accumulated amount that was not deducted in the year of its realization?

​We refer you to the Income Tax Ordinance and to the Natural Resources Profits Taxation Law, 2011 (Hebrew)