(This story originally appeared in on Dec 27, 2017)

NEW DELHI: A consortium of Indian state-run oil and gas hunters led by ONGC Videsh Ltd (OVL) appears set to drop anchor in Israeli waters for the first time amid New Delhi’s growing closeness with Tel Aviv and a widening chasm with Iran over its recalcitrance in awarding the Farzad-B gas field discovered by the same Indian grouping.Israel’s energy ministry gave its preliminary nod on December 11 to the bid for one block submitted by the Indian consortium of OVL, IndianOil, Oil India Ltd and Bharat Petroleum subsidiary Bharat Petro Resources Ltd . Energean of Greece was the other bidder to have secured approval for five blocks.ONGC Videsh MD NK Verma confirmed the development, saying the consortium will go through certain processes before deciding on drilling for oil or gas in the block. This was the first auction of exploration licences, consisting of 24 blocks, in four years since Israel blocked foreign companies from exploration in its eastern Mediterranean waters.The permission to the Indian consortium comes ahead of Israeli PM Benjamin Netanyahu ’s three-day visit to India from January 14 and indicates the willingness of both governments to expand the horizon of bilateral ties from security and defence to energy security.So far, oil and gas has not been part of the bilateral discourse, which has been largely dominated by defence equipment and water management. The only relationship the two countries had in the oil sector was Reliance Industries Ltd, India’s largest private oil company, leasing Eilat-Ashkelon Pipeline Company’s petroproducts storage capacity.The process to include oil in areas of bilateral cooperation began ahead of PM Narendra Modi’s July visit to Israel. Israeli energy minister Yuval Steinitz called oil minister Dharmendra Pradhan in June to invite Indian participation in that country’s exploration business, dominated by Delek Group and Isramco Negev. The two connected again earlier this month as the Indian bid was being cleared.Israel, with major gas reserves, has emerged as a greener pasture for the Indian grouping as Iran plays truant on Farzad-B. But New Delhi’s decision to allow state-run companies to bid in Israeli block auctions also packs a strong message to Iran — Israel’s arch rival — as it comes in the face of global players keeping off for fear of reprisal from their Arab benefactors.India’s relations with Iran have cooled off recently over Tehran’s failure to award Farzad-B to the OVL-led consortium in spite of commitments made by top leaders on both sides to see the deal through quickly. Feeling slighted, India, which had stood by Iran during western sanctions, has retaliated by reducing by a third Iranian crude imports. Tehran responded by scrapping benefits it gave to Indian refiners on crude purchase and approaching Russian companies for Farzad-B.“India stood with Iran during its difficult days and will continue to do so in the future also. But, at the same time, we also expect our economic interests to be protected,” Pradhan had said in June soon after TOI reported Iran signing preliminary deal with Russian companies for the gas field.