The Sarah licensees yesterday announced the start of drilling of the Sarah 1 well to reach gas targets. The well has a budget of $70 million.
Geologists believe that the Sarah structure is a continuation of the gas field discovered at the Dalit license. This means that there is a high chance of a discovery, but also a relatively low amount of natural gas. Geologists' best estimate for the Sarah structure is only 0.5 trillion cubic feet (TCF) of gas. According to a Netherland Sewell & Associates Ltd. (NSAI) resources report, the Dalit discovery, made in March 2009, shortly after the Tamar discovery, has 0.27 TCF of gas.
A top market source, who is an expert in analysis, told "Globes", "It is hard to see the Sarah well as worthwhile, irrespective of the dismal failure of the Myra well. I think that it's a waste of time and money."
IBI Investment House Ltd. analyst Guil Bashan told "Globes", "The partners in the oil and gas exploration license must continue the work plan if they want to keep their rights to the license. It appears doubtful whether it is worthwhile to fully develop a reservoir of up to 1.4 TCF, but if the government builds the infrastructure, or if there are hookups to the pipelines from other large discoveries, such as Tamar or Leviathan, then small reservoirs could also become worthwhile."
Published by Globes [online], Israel business news - www.globes-online.com - on September 24, 2012
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