Britain strengthens Israel's energy security

By Faiq Mahmudov

British energy company Energean has announced a $1.2 billion investment in the development of the Katlan project off the coast of Israel. The company made its final investment decision public on Tuesday.

The Israeli Ministry of Energy has granted a 30-year lease for the Katlan area, with an option to extend it for an additional 20 years.

Energean CEO Mathios Rigas stated, "Developing Katlan will provide additional energy security and drive sustainable development, both in Israel and the broader region."

Headquartered in London, Energean plans to double its production over the next few years, focusing on new prospects in Israel, including the Katlan field.

News.az sought expert opinions on the potential challenges in developing the Katlan field, its impact on the regional energy balance, and the perspectives of neighboring countries.


Economist Eldeniz Amirov told News.az that the Katlan field would not significantly alter the power dynamics in the Eastern Mediterranean. "Discovered in 2022, the Katlan field has drawn more attention following the $1.2 billion investment decision. However, with reserves estimated at 68 billion cubic meters, it won't shift the regional balance of power. For context, Azerbaijan's Absheron field reserves are 6.7 times larger, and Shah Deniz holds around 1.2 trillion cubic meters," Amirov explained. "Neighboring countries have far richer resources, so it's unrealistic to expect a significant power shift."

Amirov added, "Given the modest potential of the Katlan field, major risks are unlikely. Israel's annual natural gas export potential is estimated at around 350 million cubic meters. Previous discussions on exporting Israeli gas to Europe via Turkey, as mentioned by Prime Minister Benjamin Netanyahu in 2016, have been overshadowed by deteriorating relations with Turkey. Israel's energy sector heavily relies on its relationship with Turkey for cost-effective export routes."

Highlighting regional risks, Amirov noted, "The offshore location of the field and ongoing regional conflicts pose the main risks. However, I do not foresee neighboring countries creating risks out of jealousy or competition. The reserves of neighboring nations vastly outstrip Israel's. For instance, the UAE's reserves are 6.1 trillion cubic meters, Saudi Arabia's 8.2 trillion, Iraq's 3.6 trillion, Egypt's 1.8 trillion, and Iran's 32 trillion cubic meters. The disparity in reserves is substantial, making regional opposition unlikely."


Ilham Shaban, head of the Oil Research Center, informed News.az that a 30-year contract between Israel and the British company for the Katlan field was signed in 2012. The field was discovered in June 2022, and with the $1.2 billion investment, operations are expected to commence by mid-2027. "The gas from the Katlan field will be sold in foreign markets, not domestically," Shaban confirmed.

News.Az