Naftogaz and Naphtha Israel Petroleum pursue Black Sea exploration cooperation opportunities

Naftogaz seeks cooperation with another international partner, Naphtha Israel Petroleum Corp

The Parties have signed a Memorandum of Understanding regarding a potential hydrocarbons exploration in Ukrainian Black Sea. Naphtha has financial capabilities and proven positive work experience in the US and in Offshore Israel (Eastern Mediterranean), which will be useful for unlocking the oil and gas potential of Ukrainian offshore.

"Relevant international experience and foreign investment in Ukrainian upstream will facilitate the development of strategic oil and gas assets, which the Government granted to Naftogaz last year. It is essential for us to have such partners as Naphtha for Black Sea exploration and development, which is going to be the most capital-intensive project in our portfolio. Following recently announced partnership with OMV Petrom, who is probably the most active E&P player in the Black Sea, this new partnership with Naphtha will strengthen our ambitions in that region even further. Naphtha is the General Partner and the controlling holder of the participation units of Isramco Negev 2, LP, which is the major Working Interest holder in the world class giant 13 TCF Tamar gas field in the Eastern Mediterranean, along side with other Working Interest holders such as Chevron (the Operator) and Delek Drilling. Accordingly, it has a proven track-record of working with required deep-water technologies, and business relationship with leading offshore operators. Recent announcement of partnerships with OMV Petrom and Naphtha is in-line with our growth strategy, and is the evidence of significant interest of international players in the potential of Ukrainian Black Sea, and trust in Naftogaz as a strong partner.”, Otto Waterlander, Chief Operating Officer of the Naftogaz Group, said.

"Black Sea is long known for its great potential of natural gas. Successful discoveries in the past together with more recent discoveries in Romania and Turkey, have demonstrated the potential of exploration in this area. Unfortunately, Ukrainian part of the Black Sea has remained under-explored. Therefore, we welcome recent decision of Ukrainian government to grant Naftogaz exclusive rights for this area to finally conduct its de-risking and attempt to prove its potential. We believe Naftogaz is well-positioned for this task, and we look forward to explore potential collaboration regarding developing the block. Naphtha, through its subsidiaries, has experience in similar projects and can share its knowledge to achieve positive results in Ukraine. We view Ukrainian natural gas market as potentially attractive in long-term, and believe that may be the right place strategically to allocate our investments.”, Eran Lendner, CEO of Naphtha Israel Petroleum Corp said.

Under the MoU, the companies agreed that in addition to Black Sea they will also explore opportunities for cooperation in other upstream projects in Ukraine. 

As reported, under the Strategy approved in 2020, the Naftogaz Group has launched strategic projects aimed at growing the resource base in the Black Sea shelf and deep-water, Yuzivska block, the Carpathian region, and new PSA blocks.

About Naftogaz

Naftogaz Group is a National Oil and Gas Company of Ukraine and one of the biggest players in the gas market of Central and Eastern Europe. The Group pursues development and exploration of oil and gas fields, drills wells, provides gas and oil transmission and storage and supplies natural gas to consumers.

In 2020, Naftogaz produced 13.45 bcm of sales gas, which is 73% of all gas produced in Ukraine.

About Naphtha Israel Petroleum

Naphtha Israel Petroleum Corporation Ltd. is an Israel-based company, traded in the Tel-Aviv Stock Exchange (TASE:NFTA). Naphtha engages, through its subsidiaries, mainly in the exploration, development and production of Oil and Gas, in the US (onshore) and in Israel (Offshore). It also engages in real-estate in Israel and hotels in Europe. Naphtha is the general partner and controlling unitholder in Isramco Negev 2, LP (TASE:ISRA.L). Isramco Negev 2 is the largest Working Interest holder in the giant ~13 TCF (~370 BCM) Tamar gas field offshore Israel (2P reserves), discovered in 2009. Since production started in 2013 and until YE 2020, Tamar sold ~66 BCM, mainly to the Israeli domestic market.