Oil and gas exploration giant ExxonMobil today reported that it had found gas in Block 10 off the shores of Cyprus. The company put the find in the 5-8 TCF range, equivalent to 140-230 BCM of gas. For the sake of comparison, the Tamar gas reservoir contains 280 BCM. ExxonMobil's report is based on previous analysis of its exploratory drilling.
Senior Leumi Capital Markets analyst Ella Fried told "Globes," "This is a dramatic discovery, because the idea of a regional hub no longer appears unrealistic. Combined with the Aphrodite reservoir, the quantity of gas is close to that in Tamar. Furthermore, the US company's presence will probably be less sensitive to regional politics. Where the regional hub aspirations of Egypt and Israel are concerned, the addition of another US concern can only contribute to Israeli gas in the long term. It is very important for Israel to have other concerns here besides European ones like Eni and BP, because the Europeans are more sensitive to a connection with the Persian Gulf states. Other than Noble Energy, not a single US company operates in the Mediterranean Sea."
It is notable in the regional hub context that despite the tender declared by Minister of National Infrastructure, Energy, and Water Resources Yuval Steinitz, who called on foreign companies to look for gas in Israel, as of now, no foreign company is participating in this tender. On the other hand, if a number of gas reservoirs can be combined with encouragement of future cooperative efforts, it is likely to be positive for Israeli gas. The Aphrodite reservoir owned by Israeli partners is located in what was formerly called Block 12, near the new find.
"ExxonMobil has economies of scale, and if we're talking about a regional hub, Israeli gas can also be a partner in it in the future. Greece also has drilling, and so does Turkey. There is a significant regional presence here. The Leviathan reservoir still has the advantage of being close to production, while the other are still drilling. I regard ExxonMobil's drilling as very important for the Mediterranean Basin," Fried remarked.
Commenting on the new gas discovery in Cyprus, Israel Opportunity Energy Resources and Nammax Oil and Gas, controlled by Benny Steinmetz, said, "The current discovery in Cyprus will accelerate the efforts already being made to develop the Aphrodite reservoir owned by Delek Group, Nobel Energy, and the Cypriot government. Some of this reservoir belongs to Israel. Since it is a jointly owned reservoir, revenue for the state treasury is estimated as over NIS 3 billion. We call on the Israeli government to insist that Israel receive its rights, and to prevent development of the Aphrodite reservoir without a commitment by the Cypriot government and its partners guaranteeing that Israel will receive its share of the reservoir."
It was further reported today that Egypt would increase its supply of gas to Jordan 3.5-fold. Commenting on this, Fried said, "The existing contract for Egypt's supply of gas to Jordan is estimated at 0.3 BCM a year. The reports are unclear about the quantity, but it is possible that Egypt increased its supply to Jordan because it is winter and demand is low during this season. Egypt's supply of gas to Jordan is sporadic, but symbolic. The agreement between Egypt and Jordan provides for supplying 10% of the amount consumed by Jordan Electric Power Company. I don't think that they will supply them with more than that."
Published by Globes, Israel business news - en.globes.co.il - on February 28, 2019
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