The Energy Ministry expects to accrue record royalties of NIS 1.5 billion ($440 million) from natural resources in 2020, primarily from the extraction of natural gas, it said Monday.
The projected figure represents a 73% increase compared with total revenues of NIS 864m. in 2019 ($252m.), the ministry reported. Revenues were NIS 878m. ($256m.) in 2018.
A large majority of 2019 revenues came from natural gas and oil royalties and totaled NIS 842m. ($246m.). Royalties from the offshore Tamar gas field contributed some NIS 836m. ($244m.) to the gas royalties, reflecting the production of approximately 10.5 bcm of natural gas.
Production from Tamar decreased about 2.5% in 2019, in part due to the strengthening of the shekel versus the dollar, and reduced output in April 2019 to allow for maintenance work. Total state royalties from the Tamar field since it began production in 2013 are NIS 5.18b. ($1.51b.), the ministry said.
In addition to revenue from oil and gas royalties, the state also received approximately NIS 10.7m. ($3.12m.) from quarried materials and a further NIS 5.6m. ($1.63m.) from other fees.
The Energy Ministry expects a record increase in royalty revenues in 2020, largely from production of natural gas from the offshore Leviathan reservoir, which commenced operations on January 6.
Last Thursday, the ministry ordered gas production to be limited from the reservoir after a tremor was discovered in a pipe – known as a “jumper” – connecting the reservoir wellheads to the seabed pipeline. To minimize the tremor, platform operator Noble Energy was instructed to reduce the quantity of gas extraction by approximately 40%.
Delek Drilling, a partner in the Leviathan project, updated the Israel Securities Authority and the Tel Aviv Stock Exchange on Sunday. One of four production wells was examined with “no irregular findings,” and production capacity from the well had been increased, it said. Inspection of the other wells was continuing, the company said.
The event is “not expected to have a material effect” on the Leviathan project’s production system, Delek said, with production capacity still expected to gradually increase from 400 million cubic feet (MMcf) per day to about 1,200 MMcf per day toward the summer months.