Israel Oil & Gas
Current Production
- During the 1950's Israel discovered the on-shore Heletz Oil field. Over the past 50 years Heletz has produced 20m cumulative barrels of Oil. It has been in depletion for over 20 years and today produces only a few barrels per day.
- Yam Tetis Field - The country's only current domestic gas source. The Ministry of Infrastructure expects it to dry up early in the next decade. The field's 848 BCF of reserves was the largest find in the country before the recent Tamar discovery.
- EMG Consortium - A 2005 sales contract for gas between Egypt and Israel provides for the sale of 1.7 billion cubic meters of gas per year representing 20% of Israeli electricity current consumption ($4 - $5 per MMBtu) recently increased to $5.50 - $5.75 per MMBtu
Recent Discoveries
- Tamar (January 2009). Delek/Noble Energy (NYSE: NBL) Consortium made a significant discovery of natural gas (approx. 8.4 TCF - recently updated) off Haifa. This is a world-class discovery and as such has created increased drilling activity and significant investor interest in the region.
- Dalit (March 2009). The second recent natural gas discovery offshore Israel identified more than 110 feet of net pay. With the successes at Tamar and Dalit, a potentially substantial new resource basin with large remaining exploration potential opened up. Additional 3D in the area in the second half of 2009 with potential for additional drilling in late 2010. Dalit is situated approx. 55km northwest of Gabriella and 45km northwest of Yitzhak.
Current Exploration
Offshore:
- Noble/Delek/Avner/Isramco Consortium - plan for 1,200sqkm of 3D seismic in late 2009 early 2010. Plans for drilling a number of new offshore wells
- Pelagic - evaluation
- GGR/Botan/Modiin/ILDC - interpretation of 3D seismic and move to selection of prospect on each license
- Ratio/Noble - 3D seismic program and drilling (1) one well in 2010 - Leviathan prospect (16tcf with 50% chance of geologic success
- Adira Energy - plans to evaluate (3) three licenses
- Other - various stages of seismic programs
Onshore:
- Adira Energy - plan to drill (3) three new wells plus (3) three re-entries starting September 2010
- Givot Olam - plans to drill at least (2) two wells in central Israel during 2010
- Zion - finishing off current Ma'anit (2) two wells (5,750m); plans to drill (2) two additional deep wells (5,000m+) in 2010
- Zerach Partnership - plans to drill well near Dead Sea commencing 2010 + (1) one well near Ashdod during mid-2010
Goals and Government Policy
The Government of Israel has initiated a long term goal to enable Natural Gas as a major source of energy.
In that light:
- Natural Gas to become major fuel for Industry and Services Sectors and in addition to coal, a major source of electricity generation
- Majority of the power supply growth to come from Natural Gas - sources yet to be identified
Energy Overview
- Electricity forecast: approx. 6 BCM (165-195 Bcf) / year including IEC demand and IPPs', including co-generation
- Industrial & commercial sector forecast: approx. 3.5 BCM (90-105 Bcf) / year, mainly through the distribution infrastructure
- Additional but smaller quantities to be used for transport and private heating
Gas pipeline
Economic Miracle in the Mid-East
Financially stable:
- Israel reclassified as a DEVELOPED market by MSCI
- Considered the most advanced country in the Middle East in both economic and industrial development
- Has been ranked highest in the region on the World Bank's Ease of Doing Business Index as well as in the World Economic Forum's Global Competitiveness Report
- Has the second-largest number of start-up companies in the world (after the United States) and the largest number of NASDAQ listed companies outside North America
- In 2007, Israel had the world's 44th highest GDP and 22nd highest GDP per capita (at purchasing power parity) at US$233 billion and US$33,299 respectively
Standard and Poors ("S&P") credit ratings:
- Foreign currency sovereign credit - "A"
- Long-term local currency rating to - "AA"
OECD:
- May 2010: Israel accepted as full member of the Organization for Economic Cooperation (OECD)
License in Israeli Law
"…bestowing an exclusive right for further exploration work, and requiring the drilling of test wells. The initial term of a license is up to three years and may be extended for up to an additional four years. A license area may not exceed 400,000 dunams (approximately 100,000 acres)."
"…upon discovery of petroleum, the licensee has a statutory right to receive the third type of right, which is a production lease. The initial lease term is 30 years, extendible to a maximum period of 50 years."
"…the award of petroleum rights, with the exception of the preliminary permit and priority right, is a matter of public record and is published in the Petroleum Register and in Reshumot (The Official Gazette)."
Other:
The holder of a petroleum right is entitled to import into Israel, free of customs duties and other import levies, the goods required by him for petroleum exploration purposes.
Leasee is liable for a royalty of one-eighth (12 1/2%) of the quantity of petroleum produced and saved from the lease area.
