“Let me tell you something that we Israelis have against Moses,” remarked Israel’s then Prime Minister Golda Meir at a state dinner in 1973. “He took us 40 years through the desert in order to bring us to the one spot in the Middle East that has no oil.”
But she was wrong. In March 2010, the US Geological Survey estimated the area's hydrocarbon potential, claiming that the so-called Levant Basin province (stretching from the Sinai Peninsula to the northern border of Syria) could hold as much as 1.7 billion barrels of recoverable oil and 3,500 billion cubic meters (bcm) of natural gas.
Should these estimates prove accurate, Israel – whose waters account for some 40% of the total territory – could enter the higher league of 25 countries boasting the world’s largest gas reserves (on a par with Libya and way ahead of the Netherlands).
But, more importantly, it would put an end to the country’s dependency on foreign imports, ensuring Israel’s energy independence for the next 150 years.
Natural gas was first found in Israel's waters in 1999, with the discovery of the Noa field, which was too small for commercial development. A year later, however, Israel discovered the Mari-B site that has been supplying gas to the country’s power plants since 2004.
A breakthrough came in 2009, when the Jewish state discovered the Tamar field believed to hold enough gas to supply the country’s domestic needs for fifteen years. Yet, the record held only for a year. In 2010, a US-Israeli consortium drilling in the area announced the discovery of a larger site – the Leviathan field – said to contain some 470bcm of gas, catapulting Israel from the status of an energy importer to a potential exporter.
Cyprus has already announced its willingness to import Israeli gas at reduced prices starting from 2015. From there the energy is expected to reach Greece and the rest of Europe no later than 2018.
However, these plans are bogged down by a series of technical difficulties the consortium is currently facing. In May, for example, American energy giant Noble, one of Leviathan’s key developers and the largest stake holder in the field, was forced to stop drilling one of the site’s wells due to its “high …pressure and mechanical limits of the wellbore design,” Reuters reported last Sunday.
This could partially explain the reason behind the conglomerate’s recent decision to sell up to 30% of the rights to the field, encouraging cash injections from other energy companies.
Those, however, are not rushing to participate in such an endeavor. France’s Total, which was named “among the serious contenders” by Israel’s Globes magazine, might be deterred from entering the Israeli market, fearing to lose business with such Arab partners as the United Arab Emirates, Qatar or Iran.
The Dutch-British company Shell or America’s Chevron and Exxon Mobil have similar concerns, raising the question of who is able to take the job.
This is part I of a four-part series on Israel's difficulties in developing its new-found natural resources. Check back tomorrow for the continuation.
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