Acknowledging the enormous economic and strategic prospects available to Israel’s expanding natural gas sector, US Ambassador to Israel Daniel Shapiro warned on Monday that the country must stabilize its investment environment in order to attract international developers.
“For all the opportunities in Israel’s energy sector a note of caution is warranted,” Shapiro said, noting that the US encourages American companies to invest in Israel.
“But companies have many places where they can invest their money,” he added.
Shapiro was addressing the Israel Energy and Business Convention in Tel Aviv on Monday morning, organized by the Eco Energy Finance and Strategic Consulting Firm. While Israel has a robust gas supply in its offshore Tamar and Leviathan reservoirs, there are many countries with greater energy resources, the ambassador cautioned. The development of “a stable, predictable investment environment is critical,” as the significant upfront investment required in the hydrocarbon industry must yield reliable returns, he said.
“We have consistently encouraged Israel to demonstrate that developing its energy resources is a government priority,” Shapiro added.
The timetable for bringing Israel’s larger Leviathan gas reservoir – which will predominantly be dedicated to export – is therefore critical, according to Shapiro.
“We are urging Israel to move quickly,” he said.
The 621-billion cubic meter Leviathan gas reservoir, located about 130 km. west of Haifa, is expected to begin flowing in approximately 2017, assuming bureaucratic and financial hurdles are surmounted. Noble Energy owns 39.66% of Leviathan, while Delek Drilling and Avner Oil – both subsidiaries of the Delek Group – each own 22.67% and Ratio Oil Exploration holds 15%.
The neighboring Tamar reservoir, a 282-b.cu.m. basin about 80 km. west of Haifa, began flowing to Israel’s domestic market in March 2013. At Tamar, Noble Energy holds 36% of the basin. Delek Drilling and Avner Oil Exploration each own 15.625%, while Isramco owns 28.75% and Dor Gas owns 4%.
Although several regional letters of intent have been signed between the Leviathan and Tamar developers and Israel’s neighbors, the companies continue to face many hurdles regarding the larger reservoir’s development, due to the great financial investment required. In May, Australian hydrocarbon firm Woodside Petroleum withdrew from a projected $2.71 billion deal to acquire 25 percent of the Leviathan basin – due to disagreements with the country’s Tax Authority.
Nonetheless, Shapiro stressed that the United States remains committed to helping Israel develop its natural gas sector, which holds great potential for success, and attract investors. Yet such development requires a stable climate for investment, he stressed.
“We want the US extensive experience and expertise in developing and managing our oil and gas industry to be part of the Israeli success story,” the ambassador said.
“For all the opportunities in Israel’s energy sector a note of caution is warranted,” Shapiro said, noting that the US encourages American companies to invest in Israel.
“But companies have many places where they can invest their money,” he added.
Shapiro was addressing the Israel Energy and Business Convention in Tel Aviv on Monday morning, organized by the Eco Energy Finance and Strategic Consulting Firm. While Israel has a robust gas supply in its offshore Tamar and Leviathan reservoirs, there are many countries with greater energy resources, the ambassador cautioned. The development of “a stable, predictable investment environment is critical,” as the significant upfront investment required in the hydrocarbon industry must yield reliable returns, he said.
“We have consistently encouraged Israel to demonstrate that developing its energy resources is a government priority,” Shapiro added.
The timetable for bringing Israel’s larger Leviathan gas reservoir – which will predominantly be dedicated to export – is therefore critical, according to Shapiro.
“We are urging Israel to move quickly,” he said.
The 621-billion cubic meter Leviathan gas reservoir, located about 130 km. west of Haifa, is expected to begin flowing in approximately 2017, assuming bureaucratic and financial hurdles are surmounted. Noble Energy owns 39.66% of Leviathan, while Delek Drilling and Avner Oil – both subsidiaries of the Delek Group – each own 22.67% and Ratio Oil Exploration holds 15%.
The neighboring Tamar reservoir, a 282-b.cu.m. basin about 80 km. west of Haifa, began flowing to Israel’s domestic market in March 2013. At Tamar, Noble Energy holds 36% of the basin. Delek Drilling and Avner Oil Exploration each own 15.625%, while Isramco owns 28.75% and Dor Gas owns 4%.
Although several regional letters of intent have been signed between the Leviathan and Tamar developers and Israel’s neighbors, the companies continue to face many hurdles regarding the larger reservoir’s development, due to the great financial investment required. In May, Australian hydrocarbon firm Woodside Petroleum withdrew from a projected $2.71 billion deal to acquire 25 percent of the Leviathan basin – due to disagreements with the country’s Tax Authority.
Nonetheless, Shapiro stressed that the United States remains committed to helping Israel develop its natural gas sector, which holds great potential for success, and attract investors. Yet such development requires a stable climate for investment, he stressed.
“We want the US extensive experience and expertise in developing and managing our oil and gas industry to be part of the Israeli success story,” the ambassador said.
Link to source: http://www.jpost.com/Israel-News/US-Ambassador-Shapiro-Israel-must-move-quickly-to-develop-Leviathan-gas-reservoir-380622
