"There is still huge potential for more discoveries in the Levant Basin, especially in the deeper strata of the Tamar Sands formation. To date, we've only covered a small part of the Tamar Sands," said Delek Drilling LP (TASE: DEDR.L) CEO Yossi Abu at a conference in Tel Aviv today. "We have not fulfilled the entire potential of the Leviathan field. Leviathan's deep strata have a high probability of discovering oil, and we intend to continue oil exploration operations at Leviathan by the fourth quarter of 2014."
Abu added, "The government should adjust local regulations to the norm in the global oil and gas industry. That is the only way to stimulate the industry and to create certainty that will bring here skilled and technically capable foreign companies which will discover more fields and develop them."
"The infrastructure built at Leviathan will ensure redundancy and energy independence for Israel," said Delek Drilling chairman and Avner Oil and Gas LP (TASE: AVNR.L) CEO Gideon Tadmor, "We currently have almost 40 trillion cubic feet of natural gas, which turns us from a regional story into a global story. The partners in Leviathan have options for commercial and political collaborations, even in our challenging neighborhood. Regionally, the Palestinian Authority, Jordan, Egypt, Turkey, and Cyprus are all relevant regional export targets for us. Natural gas will be the bridge between countries and stabilize the Middle East."
Tadmor added, "The technological change that made FLNG development possible will make us a global story. It will allow us to export gas and become a dominant player in Asia too.
"We are not seeking just to maximize value for our shareholders, but to be partners in a major change for many countries in the region, especially for Israel. The commercial and economic advantages of the gas discoveries will overcome political disputes. We're talking about a win-win situation, not just commercially, but geopolitically."
"The Tamar discovery was just the beginning," said Noble Energy Inc. (NYSE: NBL) CEO Charles Davidson. "The scale of the Leviathan discovery will require external markets. We'll have to obtain the necessary regulation to enable us to develop the field, because, in contrast to Tamar, it cannot rely solely on the home market.
"Leviathan needs all the necessary regulation to move forward, and we've had problems for this reason. It is already a year behind schedule before Israeli policy was approved. Before companies can invest billions of dollars in global projects, we need certainty, because we cannot allow ourselves to invest billions only to discover that something isn't safe and has changed.
"We see Leviathan initially supplying gas to Israel and countries in the region, and in the second stage, exporting LNG. We hope that we can soon close the deal with Woodside Petroleum Ltd. (ASX: WPL), and we want this because of its global experience, LNG capabilities, and financial wherewithal, which is needed because of the scale of the project's development."
Davidson agrees with Abu about the potential for more offshore discoveries in Israel. "There is a lot of exploration ahead of us. Everything is still at the early stage. I wish we had success in the world like our success in Israel. We still have to drill wells to the deep oil target, which will be more expensive, deeper, and riskier. But finding offshore oil in this area won't be a game changer, but a world changer."
Noble Energy owns 39.66% of Leviathan, Yitzhak Tshuva's Delek Group Ltd. (TASE: DLEKG) exploration units Avner and Delek Drilling each own 22.67% and Ratio Oil Exploration (1992) LP (TASE:RATI.L) owns 15%. Noble also owns 36% of Tamar, Avner and Delek Drilling each own 15.625%, Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) owns 28.7%, and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) unit Alon Natural Gas Exploration Ltd. (TASE: ALGS) owns 4%. Delek and Noble Energy also own Cyprus's Block 12 discovery near Leviathan
Published by Globes [online], Israel business news - www.globes-online.com - on March 11, 2014
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