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Developments in Natural Gas and Oil Explorations

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Sunday, September 26th, 2010

The Land of “Milk and Honey”… and Natural Gas

Following the developments in the last few months, Israel is on the verge of absorbing impressive amounts of local extracted natural gas into its energy market. The updated map of Israel’s offshore gas potential include 3 major fields: Mari-B field located offshore the towns of Ashdod and Ashkelon, Dalit and Tamar fields located offshore the city of Haifa and the town of Hadera, and the Leviathan field, south-east of Tamar.
The Mari-B field is operated by Yam Tethys, a consortium comprised of Noble Energy Inc. (NYSE: NBL) and Delek Group Ltd. (TASE: DLEKG), since 2004. The Tamar field is operated by Noble Energy, which was given in August an approval by the state to develop and deploy gas from Tamar via Yam Tethys’ infrastructures on Mari-B. The third big field is Leviathan, which received major optimistic assessments for its huge potential this late May, enough to probably transform Israel into a natural gas exporter.
Noble Energy owns 36% of Tamar, Delek Group subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 15.625%, Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) owns 28.7%, and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) unit Dor Alon Energy Exploration Ltd. owns 4%. Noble Energy and Delek Group jointly own Yam Tethys, and both companies are partners in the Leviathan structure, together with Ratio Oil Exploration (1992) LP (TASE:RATI.L).

Regulation and the Shishinsky Committee
Due to these encouraging findings and calls from the public to reassess the tax regulation on profits from these natural resources, the ministry of finance assembled a committee to examine this issue, headed by Prof. Eitan Shishinsky. The committee is due to hand in its conclusions this October.

Oil Explorations
In addition to latest developments in the natural gas market, there are also signs for oil in Israel. Givot Olam is a public partnership devoted to oil search in Israel. Positive signs for oil were found in Givot’s search areas, near the towns of Rosh Haayin and Kfar Saba in Central Israel.

(Source: Ministry of National Infrastructure, Ynet News, Bizportal, NobleEnergy, Yahoo Finance, Globes