New Gas Field Discovered in Israel

Article Summary
Israel has identified a new gas field near Ashkelon, which can help offset the supply reduction from Egypt caused by repeated bombings of the pipeline which runs through the Sinai Desert. Taken together with other prospecting missions off the Israeli coast, the country is moving towards increased oil and gas production for domestic use - but it is unlikely to become a major energy exporter. Helmi Moussa reports.

In its frantic search for new sources of energy, Israel yesterday announced the discovery of a new gas field off the coast of Ashkelon, next to the Gaza Strip.

Israeli reports indicated that although it was not a big field, it will seriously help offset the drastic reduction in gas supply from Egypt following the repeated pipeline bombings in the Sinai. The size of the new field is about 1 billion cubic meters but its importance lies in both its proximity to the Yam Thetys field and in its high pressure. Those factors would allow the field to be tapped soon via an offshore platform.

The supply interruption of Egyptian gas has forced Israel to extract more from the Yam Thetys field, which is about to be depleted. So the discovery of this new field is important not just for economic reasons but also for its timing. The Tamar field, which contains large quantities, will not be operational before the year 2013. This puts Israel in desperate need of gas for the rest of 2012. For that reason, prominent [oil] companies in the region are pressuring the Israeli government into a deal that would make the [new] field a worthwhile investment [for the companies], because its development would require between US $100 and $200 million, making it barely practicable because the return [on the investment] will not be much higher than that.

Noble Energy, the partner company in the exploration and drilling of the Leviathan field west of Haifa has lowered its estimate for the amount of oil in the field, while raising its estimate for the amount of gas in it. New exploration is scheduled to begin in the coming days with the arrival of a new platform after drilling was stopped in the area last April. The results of the exploration will be published in three months.

The company said that it no longer expects to find large quantities of oil [in Leviathan] and that its current estimate is 600 million barrels, not 4 billion barrels as previously estimated. But compensating for that, the company announced that it increased its estimate for the amount of gas in Leviathan by about 4 trillion cubic feet, for a total of 20 trillion cubic feet.

According to the report, the gas is located 4,900 meters below the seafloor, and large quantities of oil may be found between 6,200 and 7,400 meters. The oil and gas are generally found in three distinct ground layers.

It should be noted that drilling at Leviathan 1 began about a year ago but was halted eight months ago due to technical failures. The Leviathan field is 135 miles north-west of Haifa, and the excavations have so far cost about US $170 million of the $215 million budgeted for the excavation project.

In December 2010 Sedco Express announced the presence of a field containing 16 trillion cubic feet of gas in Leviathan. That field was discovered on the same [tectonic] plate as the Tamar field, which was discovered in 2009. Drilling proceeded with the hope of striking oil in the deeper layers. Then the drilling was halted [at Leviathan 1] for technical reasons and was started at Leviathan 2 and Leviathan 3, but drilling at Leviathan 3 was also stopped after a technical failure at the "North America" drilling platform.

The Israeli search for gas and oil was not free of political problems. There was the issue of demarcating the maritime borders of the exclusive economic waters between Israel and Lebanon. There were also many problems with the Palestinian Authority (PA). The PA's problems with Israel are not only about maritime borders but also about land borders, especially in the West Bank and in the common [oil] fields that Israel is tapping.

Recently, the PA [announced that it] considered the Israeli drilling at the Mijd [as transliterated] field to be illegal because it is on Palestinian land, west of Ramallah. According to Jamil Mukhtar, the Deputy Chairman of the Department of Environment in the PA, 80% of the Mijd field is located in the Palestinian territory occupied in 1967 and does not belong only to Israel. The Mijd 5 field is not large, and contains about 1.5 billion barrels from which 1,000 barrels can be extracted daily. However, it is considered important given the current needs. In addition to this field, there are several other small fields that some believe can fulfill 10-40% of Israel's energy needs.

Meanwhile, former Mossad Chief Meir Dagan, who joined one of the companies prospecting for oil in Israel, cautioned that Israel should not describe itself as a "major oil and gas power."

Dagan said: "Actually, gas resources were discovered in the Mediterranean a few years ago, in Yam Thetys, and before that in Gaza. And it's highly probable that there are energy resources off the coast of Israel, so it is advisable to search everywhere. But the State of Israel is not rich in mines, and if we free the Israeli economy of imports, that would be great, and we have a duty to search [for oil]. But in spite of that I don't want to characterize Israel as a great oil and gas power. It does not have as many reserves as Qatar or Russia, and we do not have as much oil as Iraq. But there is [enough] for a state such as ours to exploit."

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