JERUSALEM, Oct 27 (Reuters) – U.S.-based Genie Energy could turn to the courts or even Mongolia in its effort to challenge a local government decision that has blocked its hunt for oil just over 40 kilometers from Jerusalem, a senior official at the group said.
Genie, backed by media mogul Rupert Murdoch, says it aims to secure energy independence for Israel, a country that has never had a serious oil find despite years of exploration.
But Genie is battling a growing number of setbacks. Last week, the Supreme Court put on hold a separate plan to drill exploratory wells in the Israel-controlled Golan Heights.
Drilling in the Ella valley outside Jerusalem is key for Genie, however, and Geoffrey Rochwarger, head of Genie’s operations in Israel, said on Monday that the company could appeal to the Supreme Court to overturn the ruling last month.
“We were a bit surprised — shocked is probably a better word for it,” Rochwarger, also vice chairman of Genie.
Genie had been due to begin drilling in the biblical valley where David is said to have fought Goliath. The area of its license alone contains 40 billion barrels of oil, the company estimates, more than what the world consumes in a year.
The company spent over $20 million preparing for the pilot.
But after years of lobbying from environmentalists and residents, a Jerusalem local committee last month stopped work on the project, citing historical interest and possible environmental impact. It also expressed concerns about scaling up to commercial production.
“We now have to decide what do we want to do. What’s our next step?”
Rochwarger said Genie’s technique causes minimal damage to the surroundings. A similar method, he said, will soon be used by Royal Dutch Shell in neighboring Jordan.
Help in promoting the project, however, could also come from Mongolia, where Genie last month received permission to conduct a similar pilot – even if collecting data could take years.
“In Mongolia we would probably try…to replicate, or just emulate, as many of the characteristics as possible, to be able to then use the data afterwards,” he said.
Genie Energy was spun off from telecoms group IDT Corp in 2011. As well as Murdoch, it has attracted investment from financier Jacob Rothschild. Together they own a 5.5 percent stake worth $11 million. Former U.S. Vice President Dick Cheney is on the advisory board.
“What we’re doing, energy independence for Israel, makes a lot of sense to them,” Rochwarger said.
Genie plans to drill 10 exploratory wells over three years in the Golan Heights, at a cost of $25-$30 million.
Rochwarger argues Genie’s geological evidence is strong — even though not far away, Zion Oil and Gas and Givot Olam have been drilling for years and have yet to find commercially viable deposits.
The plan has received government approval, but since Oct. 20 faces a two-month, court-imposed injunction after an environmental group petitioned for further discussion.
“The delays affect not only the company, but also dozens of suppliers from the Golan and Israeli workers,” Rochwarger said.
Israel captured the Golan Heights from Syria in a 1967 war and annexed it in a move not recognized internationally.
“If we can prove the resource, we believe that this becomes a project of national significance, and that the government will do what it can to protect its rights to this resource,” he said. (Editing by Clara Ferreira Marques)
The deepest oil well drilled in Israel’s 65-year history may be the most important.
Houston’s Noble Energy Inc. (NBL) will probe 6,500 meters (4 miles) below the Mediterranean seabed later this year, targeting as much as 1.5 billion barrels of crude, equal to about 15 years of Israeli demand.
While explorers have found enough natural gas in the past five years to turn Israel into an exporter, a major oil discovery would break new ground. The Middle East’s third-largest economy spends about $10 billion a year importing 98 percent of the oil it uses. Domestic production would increase tax revenue, boost the country’s balance of payments and reduce vulnerability to supply disruptions.
“The economic impact on Israel would be far greater than that of natural gas,” David Wurmser, director of the Washington-based Delphi Global Analysis Group, said in a phone interview. “Finding the oil would mean big money for the Israeli companies and the government.”
Zion Oil & Gas began re-entry operations this week at their Elijah #3 well in Northern Israel. Israeli drilling company, Lapidoth, erected it’s drilling rig and prepared the site. Zion is scheduled to begin its vertical seismic profile operation in the well early next week after completing wireline logging.
Aug. 26, 2008
Ehud Zion Waldoks , THE JERUSALEM POST
The search for oil in Israel got a big push forward on Tuesday night after The Nature and Parks Authority general assembly approved plans for the drilling of an exploratory hole to search for oil in the Judean nature reserve. Two Israeli companies, Ginko Oil Exploration and Delek Energy Systems, believe there could be as much as 6.5 million barrels below the reserve.
The assembly approved Zuk Tamrur 4 on the condition that the Authority comes up with strict guidelines to reduce the environmental damage as much as possible. The assembly also demanded that the companies rehabilitate the area afterwards. In addition, if oil were to be found, the assembly ruled, the pumps to remove it would have to be placed outside the reserve.
Until now, the Authority’s administration had rejected all attempts at drilling, but they were overruled Tuesday by the general assembly, which comprises representatives of environmental organizations and the government.
Avraham Poraz, former internal affairs minister and now consultant to the oil companies, told The Jerusalem Post Tuesday night how he explained the issue to the assembly a month ago in the run-up to the decision.
“I put it to them very simply. One third of Israel is nature reserves. It cannot be that we can’t search for oil in one third of the country.
“Moreover, I told them that according to our ecological estimations, the damage would be minimal because we are talking about 1.25 acres without fences, or dogs or anything like that,” he told the Post.
The Society for the Protection of Nature in Israel (SPNI) decried the decision.
“We are distressed that the assembly gave in to the pressures of the initiators, did not heed its own science committee’s recommendation against the plan and so will cause unnecessary damage to the reserve,” the organization said in a statement.
The Authority had suggested drilling a hole diagonally from outside the reserve to search for oil, but a geological consultant said that would create too many problems, an Authority spokesman said.
Ginko director Rami Karmin told the Post earlier this week that Zuk Tamrur 4 represented Israel’s best bet to find oil. He said they only needed 1.25 acres for two months to drill a hole 2,000 meters deep and see if they struck oil. 6.5 million barrels would be worth about $800 million, he added.
The area where the companies want to sink their hole represents a bridge for animal populations between the Judean and Negev reserves, the Authority’s science committee had written, and putting in a hole would block that narrow passageway. It had also said that any sort of drilling was bound to cause severe environmental damage and therefore recommended rejecting the request.
Two Israeli energy companies are convinced the best chance for finding oil in Israel lies at a site in the Judean Desert nature reserve and have stirred up a storm of controversy with their persistent requests to drill an exploratory hole.
The companies, Ginko Oil Exploration and Delek Energy System, want to drill in an empty corner of the desert. However, the Nature and Parks Authority Science Committee and the Society for the Protection of Nature in Israel (SPNI) contend that even exploratory drilling will destroy the fragile ecosystems in the reserve. The two sides will go head to head on Tuesday in front of the Nature and Parks Authority general assembly, the Authority’s highest body, which will decide whether to grant the companies’ request.
The situation, from an environmental perspective, has also been complicated by the fact that Environmental Protection Minister Gideon Ezra has recommended the drilling plan, although on the condition the ecological damage was reversible.
Ginko made headlines two years ago when it discovered a small amount of oil near the Dead Sea through Zuk Tamrur 3. This time around, Ginko director Rami Karmin believes Zuk Tamrur 4 in the reserve has the best chance to produce as much as 6.5 million barrels.
But even he admits that drilling for oil is “a tricky business” and there are no guarantees.
“We are talking about drilling in a spot that the Authority had already approved drilling there 10 years ago, and we requested that spot because we thought they’d approve it again. The district committee approved it two weeks ago and now we need the Authority’s approval,” he said.
“We need [approximately] 1.25 acres out of 150,000 for two months so that we can drill an exploratory hole 2,000 meters down. We had an ecological company evaluate the area. There have also been other exploratory holes in the Dead Sea area and you can’t even see them anymore,” Karmin argued.
According to Karmin, Zuk Tamrur 4 is the likeliest place in Israel to find oil because of its unique geological properties.
“There is oil around the Dead Sea but the constant little earthquakes that occur because the Sea is on a fault line release the pressure before the oil can be driven to the surface. At this spot, there is a four-way closure and there is a good chance there is oil there,” he said.
However, SPNI argued Sunday in a position paper ahead of Tuesday’s meeting that the relatively small predicted reservoir did not justify the massive ecological damage. Israel uses about 80 million barrels of oil per year, or 270,000 per day. 6.5 million barrels would meet Israel’s needs for less than a month.
Karmin contended that the amount of oil wasn’t the point, its cost was.
“Six-and-a-half million barrels is worth about $800 million. The government would be receiving about $400m. in fees and taxes – can we really afford to turn down that much money?” he demanded.
The Authority’s Science Committee, nevertheless, has submitted its assessment report to the general assembly and has counseled the body to prohibit the companies from drilling. The committee consists of, among others, two professors and two doctors, including the Environmental Protection Ministry’s chief scientist Dr. Yishayahu Baror – who apparently disagrees with his minister.
Rather than a deserted corner of the desert, the site actually sits in the middle of a very narrow corridor which serves as a natural transit area between the Judean Desert Reserve and the Negev reserve, the committee said. Disturbing the area would have a massive impact on plant and animal life in the whole area, they argued. Animal populations would be cut off from their main groups with no way to get back to the Negev, they said.
The committee addressed both the potential damage from the initial drilling, but also the greater potential impact of striking oil.
While an exploratory hole would inevitably cause some damage, if oil was found, much more damage would result, the committee wrote. A constant stream of tanker trucks and the new roads they would require would doubtless result in severe damage. Even putting up lights, as is usual for drilling sites, would adversely affect the delicate ecosystems. The inevitable accidents if oil were found would pollute the ground in the area as well, according to the report.
The committee concluded by reminding the general assembly that it was precisely their job to protect nature in the face of such threats.
Meanwhile, even if the committee voted against granting them permission on Tuesday, Karmin vowed to employ additional legal measures to get the permits.