Mani Cohen 370.
(photo credit: Courtesy Bank Hapoalim)
Superstar investor Warren Buffett must have been taken aback when natural gas
started flowing to Israel from the Tamar field this year. Buffet famously said,
“If you’re going to the Middle East to look for oil, you can skip Israel. If
you’re looking for brains, look no further,” but the recent developments of
Israel’s offshore gas have turned the conventional wisdom about Israel’s natural
resources on its head.
In 2013, the gas is expected to add an entire
percentage point to economic growth.
The turmoil in Egypt, which had for
years supplied Israel with natural gas, demonstrates the importance increased
energy independence plays for moderating the waves of geopolitical uncertainty
in the region. It would give Israeli industry a reliable, cheap fuel that would
bring down production costs, giving the country a competitive edge.
Hapoalim’s Mani Cohen offers The Jerusalem Post
a primer on Israel’s natural gas
1. Gas has been long coming
Gas developments in Israel did not
The gas development began in 1999-2000, with the
discovery of the Noa and Mari B reserves off the coast of Ashkelon. Mari B has
been supplying gas to the Israel Electric Corporation for the past decade. In
2009, the Tamar reserve was discovered off the coast of Haifa, containing about
(billion cubic meters). The following year, the Leviathan
reserve, with 535 b.cu.m. was discovered.2. There are smaller reserves
you’ve never heard of
Aside from the big fish in the sea, a slew of smaller gas
reserves have been discovered.
Among them: Dalit, Tanin (“crocodile”),
Dolphin, Carish (“shark”) and Samson.3. There is plenty to go around
Current estimates put the total gas reserves at 900 b.cu.m. But Israel looks to
only need an estimated 500 b.cu.m. in the coming years.
plenty for export.
4. Forty percent is heading abroad – for now
the government approved a 40% (360 b.cu.m.) export limit for the gas. However,
strong opposition still exists on how much should be kept for local usage, and
the decision is headed to the high court next month. That could change the
outlook for how the gas would be divvied up.5. Developing gas takes a
lot of cooperation
A slew of companies have partnered to tap Israel’s natural-
gas reserves. In addition to Noble, the primary developer, the local companies
partnered in the Tamar and Leviathan fields are Avner, Delek Drilling and Ratio
Oil.This article was produced in conjunction with Bank Hapoalim.