Givot Olam Oil Exploration Limited Partnership (TASE:GIVO.L) made another significant announcement today about developments at its Meged 4 drilling, near Kfar Saba.
Givot Olam announced that analysis of the electronic testing of the reservoir found that it had 2 million barrels of pre-production oil per sq.km. The reservoir includes a closed oil structure covering over 50 sq.km, with a potential of 100 million barrels of oil.
However, Givot Olam noted that it was not yet clear if the oil could be commercially exploited, or how much could be produced from the reservoir. Givot Olam consultants in London are still examining these questions.
Givot Olam stated that the data were based on a geological survey and logarithmic analysis (electrical tests). Givot Olam stressed that this was a preliminary structure analysis.
Givot Olam has made numerous announcements in recent months since beginning drilling at Meged 4: some optimistic, others pessimistic.
In late July, following the previous pessimistic report, Givot Olam announced that there was still a marginal chance of oil production from the reservoir. Two weeks previously, it announced that quantities of water had been found in the drill site.
The announcement stated that 32 barrels of liquid had been pumped from Meged 4, containing only 3.2% light oil. The rest was water. Givot Olam emphasized at the time that this was an unexpected discovery, since no water was expected at this drill site.
Crude oil has been trading at an average of $25 a barrel lately. The value of the reservoir could therefore reach $2.5 billion. Globally speaking, this is not a large reservoir, and would supply Israel's needs for 18 months at the most.
Published by Globes [online] - www.globes.co.il - on September 11, 2003