Delek Drilling Ltd. and Avner Oil Exploration Ltd. - both belonging to businessman Yitzhak Tshuva - have agreed to take a 50 percent stake in key Dead Sea oil drilling projects run by Ginko Oil and Gas Exploration.
Ginko and partner Lapidoth Israel Oil Prospectors struck oil last week at one of the drill sites included in the deal, called Zuk Tamrur 3, and expect to find more as exploration continues.
"Naturally, if a big player joins you it's a very nice hint to investors," said Ginko geologist Dr. Eli Tannenbaum.
He believes Zuk Tamrur 3 is an "early bird in the area" or harbinger of discoveries to come, whose primary value is to show prospective investors the area's potential for oil exploration.
While several months of tests still lie ahead, Zuk Tamrur 3 is expected to supply 100 to 200 barrels of crude daily in the near future, and "on the order of magnitude of hundreds of thousands of barrels" in total, which Tannenbaum admitted is not much.
"Financially it's worth it since we don't have to drill the well," he said. Reactivating the Zuk Tamrur 3 site cost the company only "a few hundreds of thousand of dollars," he estimated.
If hundreds of millions of barrels of oil are in fact to be found in Israeli territory in the Dead Sea basin, as Tannenbaum expects, that would supply domestic demand for years, he said, estimating Israeli consumption at about 50 or 60 million barrels annually.
Ginko intends to use its license to drill in 10 sites in the area soon. Tannenbaum said that the company's next step within the next few months would be to continue exploring and testing the Zuk Tamrur 4 site, two kilometers to the north of Zuk Tamrur 3, which studies have shown are likely to hold five million barrels of oil or more. Drilling Zuk Tamrur 4 would cost NIS 3 million to NIS 4m., Tannenbaum said.