Israel Matzav

Gas drilling starts this week

Israel's Delek Ltd. and Texas-based Noble Energy will start drilling for natural gas this week off Israel's northern coast.

Seismic surveys show the Leviathan prospect, located 135 kilometers, or about 84 miles, off Israel's northern coast, may hold 16 trillion cubic feet of natural gas, enough to supply all of Israel's gas needs for 100 years.

If the exploratory drilling, which gets under way this week, confirms those figures, it could transform Israel, which has been dependent on fuel imports throughout its history, into an exporter of natural gas. It could also create local, regional and global political ripples.

Leviathan follows the 2009 discovery of Tamar, an offshore gas field containing 8 trillion cubic feet, which was the largest gas find in the world in 2009 and the largest ever for Israel.

"We see a huge revolution in the Israeli energy sector," said Gideon Tadmor, chief executive of Delek Energy Ltd., the Israeli energy company that, through its two subsidiaries, owns about 45% in the Leviathan prospect and a 31.2% stake in the smaller Tamar field. Houston-based Noble owns a 40% share in Leviathan and a 36% share in Tamar.

The companies expect to announce the results of their drilling campaign early next year. The five-month effort will cost $150 million and reach a depth of 5,500 meters, or 18,150 feet, below the seabed in waters 1,700 meters deep.

There are some disputes about the royalties - read the whole thing.

I'd be thrilled if they used some of that royalty money to cut our taxes.

posted by Carl in Jerusalem @ 3:47 PM