JERUSALEM, March 17 (Reuters) - Israel awarded licences

to BP, Azeri national oil firm Socar and local company

NewMed Energy on Monday to explore for natural gas in

Israeli waters as the country seeks to boost domestic gas

reserves and expand exports.

In 2023 the trio jointly placed a bid for two offshore

blocks in a fourth licensing round. Israel's Energy Ministry

said that additional licences are expected to be granted and a

fifth bidding round is planned for later this year.

As part of the licences for the so-called Cluster I near the

Leviathan field, Socar will act as operator of the exploration

consortium while BP will be involved in Israel's natural gas

sector for the first time. NewMed is already the largest

stakeholder in Leviathan, the giant offshore field operated by

Chevron ( CVX ).

Each company will hold about a third of the rights in each

licence.

Cluster I is a 1,700 sq km area located in the Mediterranean

at the northern part of Israel's economic waters. The consortium

is expected to conduct seismic and geological surveys in the

first phase of exploration, with drilling in a second phase

based on survey results.

"Natural gas is a strategic asset that strengthens our

economic and diplomatic standing worldwide, particularly in the

Middle East," said Energy Minister Eli Cohen. "That's why we are

working to expand natural gas production for both the domestic

market and exports, especially in these times."

The gas-rich offshore basin straddling Egypt, Israel, Cyprus

and Lebanon has drawn some of the world's top energy companies

in recent years, particularly as Europe scrambles to secure

supplies to replace Russian gas in the wake of Russia's invasion

of Ukraine.

Israel is positioning itself as a regional energy hub and

has committed to supplying natural gas to Europe, which has been

diversifying away from Russia.

Exploration for oil and gas resources is a high-risk,

high-reward business that includes seismic surveys and the

drilling of wells, a process that can take several years.

The ministry reported this month that Israel's natural gas

exports to Egypt and Jordan rose 13.4% in 2024.