Barclays: Myra, Sarah will break Tamar, Leviahtan monopoly

By GUY KATSOVITCH
June 30, 2011 23:37

“This new information is likely to drive more interest to the area from both the energy world as well as the financial world,” report says.

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Tamar offshore gas field.

tamar offshore gas field_311. (photo credit: Courtesy)

Barclays Capital and Deutsche Bank are both upbeat on the gas and oil discovery announced by the Myra and Sarah licensees.

“This new information is likely to drive more interest to the area from both the energy world as well as the financial world,” Barclays Capital said in a report Thursday.

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Deutsche Bank said in a report, “The chances of success are extraordinarily high, significantly higher than Tamar... and higher than Leviathan.”

Barclays added: “Since January 2009, over 30 trillion cubic feet of natural gas has been targeted for drilling, post 3-D seismic imaging. So far, Noble Energy Inc. and GeoGlobal Resources Inc. are the only active operators in the region, and there are only two active rigs.

“The potential resources are a positive for the Israeli government, which has become increasingly concerned that the Tamar consortium would be an effective monopoly in supplying gas to Israel, and these licensees could help break that perception.”

Deutsche Bank said the Myra and Sarah discovery “would affect Tamar and Leviathan in contrasting ways: The additional gas discovery could make a LNG (liquefied natural gas) project more cost-effective for Leviathan, but it could put pricing pressure on the Tamar project, which until now only had expected competition from Egyptian gas imports, which have recently proven unreliable.

“Tamar gas will be directed toward the domestic Israeli market, and Thursday’s announcement could delay or reduce the sizes of potential contracts for Tamar, as customers may prefer to await further developments at Myra and Sara before concluding large contracts with Tamar.”

Deutsche Bank said the Myra and Sarah owners intend to cooperate on exports with the Leviathan partnership (Noble Energy, Delek Group and Ratio Oil Exploration) and to compete in the domestic market with both Leviathan and Tamar (owned by Noble Energy, Delek Group, Isramco and Alon Natural Gas Exploration).

Neither bank covers Myra’s and Sarah’s Israeli licensees, Israel Land Development Company Energy and Modiin Energy.


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