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.

Bank Hapoalim’s Mani Cohen offers The Jerusalem Post a primer on Israel’s natural gas find.

1. Gas has been long coming


Gas developments in Israel did not happen overnight.

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 238 b.cu.m.

(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.

That leaves plenty for export.

4. Forty percent is heading abroad – for now


In June, 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.

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