Following our previous update in January 2026 regarding the possibility of a new offshore bid round, on July 7, 2026, following a recommendation by the Israeli Petroleum Council, the Israeli Ministry of Energy and Infrastructure (the “Ministry”) officially published the Call for Bids (“CFB”) for the Fifth Offshore Bid Round (“OBR5”) for natural gas exploration in Israel’s Exclusive Economic Zone. The launch is part of a broader strategy to expand exploration, increase production and strengthen Israel’s energy security and economic and geopolitical standing, in addition to increasing exports. Our team is experienced and well positioned to advise foreign energy players who are considering this new opportunity. Minister of Energy and Infrastructure Eli Cohen stated that “natural gas is a strategic asset that strengthens our economic and political position in the world in general and in the Middle East in particular”, further noting the government’s policy to expand natural gas exploration, bring international energy companies to invest in Israel, and increase natural gas output for both domestic consumption and exports.
Within the framework of OBR5, five zones (Zones A, B, C, F, and J) comprising 21 exploration blocks with a total area of approximately 7,100 sq. km are offered for bidding. The Ministry has created multi-block, multi-license zones to provide companies with an opportunity to explore larger areas with various geological prospects.
The CFB sets out an indicative timetable for OBR5, which includes an opening date for submission of bids on September 23, 2026 and a closing date for submission of bids on November 11, 2026 (14:00 Israel time). The estimated date for the announcement of successful bids currently ranges between December 2026 and January 2027, and the estimated date for the execution of the licenses is during the first quarter of 2027.
Key participation requirements include the following: (i) a company wishing to bid as an operator must meet the qualifications set out in the CFB and Schedule 4 thereto; (ii) in case of a consortium, the proposed operator must comply with the experience and capability requirements outlined in the 2016 Israeli Offshore Regulations and must hold at least a 25% interest in the consortium; (iii) bids must be submitted for an entire zone (not individual blocks), and the successful bidder will be granted licenses for all blocks in the zone; (iv) each bidder must pay a participation fee of US$50,000; and (v) bids must include a bid bond as detailed in the CFB. Bids are to be submitted in both hardcopy and digital format to the Petroleum Commissioner’s Office in Jerusalem.
According to the principles of the competitive process and the Israeli Petroleum Law and regulations promulgated thereunder, the winning bidders in each zone will receive several exploration licenses for an initial period of three years. During this period, the license holders will be required to execute a work plan to which they committed in advance, the core of which is the examination of the potential for natural gas discovery in the zone they are awarded. After the execution of the work plan, it will be possible to extend the licenses or some of them for a total period of up to seven years, subject to the execution of an additional work plan. Proposals will be scored based on the quality of companies’ work plans, including surveys and drilling commitments, as well as signature grants (upfront payments made for exploration licensing rights).
OBR5 builds on the fourth offshore bid round (OBR4), in which six exploration licenses were awarded to a consortium including SOCAR (the State Oil Company of the Republic of Azerbaijan), BP and NewMed Energy for Zone I, and a consortium of Eni[1], Dana Petroleum and Ratio Energies for Zone G. Additionally, the launch comes amid expansion of production capacity at the Tamar and Leviathan reservoirs, completed in early 2026, and follows Israel’s signing of its largest natural gas export agreement to date – a deal with Egypt valued at approximately NIS 112 billion (US$37.4 billion). The Ministry estimates that there are hundreds of additional BCM of natural gas yet to be discovered in the Eastern Mediterranean. This news should be of significant interest to international energy companies interested in exploring the growing Israeli market.
Should you have any questions or require any further information regarding the above developments, please do not hesitate to contact any of the members of Arnon, Tadmor-Levy’s Oil & Gas practice. Our team has significant experience in the industry including assisting foreign energy companies throughout the bidding process.
[1] In March 2026, it was announced the Eni had dropped out of this consortium
The above content is a summary provided for informational purposes only and does not constitute legal advice. It should not be relied upon without obtaining further professional legal counsel.
