Huge natural gas find

Israeli Gas Find Tips Energy Balance
The discovery of a major natural gas field off the coast of Israel could help make the country an energy exporter

By Neal Sandler
Europe

A popular quip in Israel's energy industry has it that when Moses left Egypt, he took a wrong turn on his way to the Promised Land: The Biblical figure should have veered right to Saudi Arabia rather than left to Israel, which has long been assumed to lack any petroleum reserves. Now it appears Moses might have had a better nose for energy than previously thought. On Jan. 18, just hours after a cease-fire began in the Gaza Strip, Israel announced the discovery of a major natural gas field off its northern Mediterranean coast.

The news sent the Tel Aviv stock market sharply higher on Sunday as the size of the find appeared to eclipse the negative impact of the recession the country is now facing. Shares of the Israeli partners in the Tamar-1 drilling site jumped between 42% and 124%, though profit-taking pulled some down on Jan. 19. Even the Israeli shekel joined in, climbing by up to 1.6% against the dollar on Monday before settling the day up a half-point.

"This is one of the biggest finds ever, and could even turn Israel into a natural gas exporting country," predicts Yitzhak Tshuva, the majority shareholder in Israel's Delek Group (DELKG.TA), one of the partners in the offshore drilling. That would be a huge change for a country that has been nearly 100% dependent on imported oil and coal. Last year alone Israel spent $12.8 billion on fuel imports.
Significant by Global Standards

The find, located 90 kilometers due west of the port of Haifa, is the first large field discovered in the eastern Mediterranean and is significant even by global standards. "This is one of the most significant prospects that we have ever tested, and appears to be the largest discovery in the company's history," says Charles Davidson, chairman and CEO of Houston-based Noble Energy (NBL), the U.S. partner in the consortium.