Tuesday, November 22, 2016

"Over 60% of Leviathan development plan already closed" - GLOBES

Yossi Abu, Delek Drilling CEO
22/11/2016, 16:33
Nati Yefet

Delek Drilling CEO Yossi Abu: We are in advanced stages of signing Leviathan financing agreements.

Yesterday, at the Eco Energy conference in Kfar Maccabiah, Delek Drilling LP (TASE: DEDR.L) CEO Yossi Abu said that over 60% of the Leviathan gas field development plan has been covered in financing agreements. "Since the approval of the outline, we have invested over half a billion of shekels in approving Leviathan plans and preparations, in order to ready Leviathan for investment."

"We will begin exporting gas from Tamar to Jordan as early as this year," Abu said. He said that as soon as Israel connects to the to the Jordan-Egypt pipeline it will be much easier for it to export to Arab countries.

"We are in advanced stages of signing Leviathan financing agreements, and continue towards our goal of reaching an investment decision for the development of Leviathan by the end of the year.

"For us, this has been in year in which we finally emerged from a deep freeze that resulted from an ongoing regulatory crisis. We are entrepreneurs and patriots. We are a commercial company that does not for a moment forget its Israeli identity and commitment to the state of Israel. We aspire to reach every manufacturer, in central Israel and in outlying areas."

Tadmor: the gas exploration tender may fail

Former Delek Drilling chairman and current owner and chairman of Navitas Petroleum Gideon Tadmor also spoke in the conference and called on the government to reexamine the Tzemach Committee report in order to increase the attractiveness of the Israeli gas market for new exploration companies. "Without a large natural gas market, it will be impossible to finance the development of future discoveries."

At the present, Tadmor believes that the Ministry of Energy's new offshore exploration tender is most likely to fail. There are various reasons: low oil prices, which have created a buyers' market and have resulted in a freeze in many natural gas projects; the substantial financial requirements from exploration companies; and the delays in building infrastructure that will generate demand for natural gas in the Israeli market.

"There are currently assets with a value of over $200 billion on the shelf and as a result development costs have dropped significantly. The cost of a single maritime drilling has dropped from $140 million to only $40 million.

"The conditions in Israel, mainly financial conditions, create obstacles which prevent new companies from entering Israel. The state must undertake complementary measures that will create a new development momentum. As part of the gas framework agreement, it was decided that in 100 days the Minister of Finance would present incentives for small and medium fields, but this has not happend."

Published by Globes [online], Israel business news - www.globes-online.com - on November 22, 2016 | © Copyright of Globes Publisher Itonut (1983) Ltd. 2016