Israeli Natural Gas Find Keeps On Getting Bigger But Could Ignite Trouble
Vosizneias Tel Aviv – Israel’s natural gas bonanza in the eastern Mediterranean just keep getting bigger, with reserves currently pegged at around 25 trillion cubic feet.
That’s enough to guarantee the Jewish state, dependent on imported energy since it was founded in 1948, energy security for at least two decades.
The strikes at three fields, dubbed Tamar, Dalat and Leviathan, could even turn Israel into a gas exporter and transform its economy. There are indications that there’s oil down there as well.
But the offshore finds may become a casus belli (case for war) as Lebanon, Israel’s northern neighbor and longtime battleground, lays claim to the gas fields as well.
Lebanon’s As-Safir newspaper reported June 8 that the biggest field found off Israel, Leviathan, extends north into Lebanese waters and could well aggravate tensions between the countries.
Under the headline “Israel prepares to steal gas fields in Lebanon’s waters,” the leftist daily said if Israel tried to siphon gas from Lebanese territory, Beirut would be forced to defend its resources.
One of Hezbollah’s top leaders, Hashem Safieddine, head of the Iranian-backed movement’s executive council, has declared it won’t allow Israel to “loot” Lebanese gas resources.
Israel’s military chiefs say Hezbollah currently possesses around 45,000 missiles and rockets, which could be fired at Israel’s emerging energy infrastructure centered on the port of Haifa.
The city was repeatedly hit by Hezbollah rockets during the 34-day war with Israel in July and August 2006.
These days, Hezbollah purportedly has long-range weapons that have greater accuracy and carry more destructive warheads than those used in 2006. These are capable of hitting just about anywhere in Israel.
In the event of renewed hostilities, and both sides are talking tough again, Israel’s energy installations would be prime targets.
Lebanon’s parliament speaker, Hezbollah ally Nabih Berri, has urged the Beirut government to move swiftly to start its own offshore exploration or risk Israel claiming whatever resources there are.
“Israel is racing to make the case a fait accompli and was quick to present itself as an oil emirate, ignoring the fact that, according to the maps, the deposits extend into Lebanese waters,” said Berri.
The speaker, who has submitted a parliamentary bill to launch exploration of Lebanon’s potential offshore reserves, declared: “Lebanon must take immediate action to defend its financial, political, economic and sovereign rights.”
Israeli officials insist that the gas fields lie within Israeli territorial waters.
However, the liberal Haaretz daily noted Tuesday, “Israel has yet to declare its exclusive economic zone, though this usually applies to what in the sea, such as fish, and not what lies under the continental shelf.”
It quoted Professor Moshe Hirsch of Jerusalem’s Hebrew University, an expert in international law, as saying that problem could arise when the continental shelf is shared by more than one country.
But he maintained the gas lies squarely in Israel’s sector of the continental shelf and so there was no need top declare an exclusive economic zone.
The first strikes were made early this year at the Dalit field off Hadera, south of Haifa by a consortium headed by Noble Energy, a U.S. company with headquarters in Houston, which is working with three Israeli firms.
Tamar, 50 miles east of Haifa, was found in April. Last week Nobel raised its original estimate of the field’s size by 33 percent to 8.4 trillion cubic feet of gas.
But then came the discovery of Leviathan, double the size of Tamar at an estimated 16 trillion cubic feet of gas, further off the coast.
Nobel said that total offshore reserves could top 30 trillion cubic feet, double Britain’s giant gas fields in the North Sea, with a conservative value of some $300 billion. Nobel is moving a drilling platform from the Gulf of Mexico to step up exploration.
Gas production is to begin in 2012. Israel is planning to build a liquefied natural gas plant near Haifa but it probably won’t go online until 2015.
The gas finds, particularly Leviathan, which may turn out to be even bigger, are “nothing short of a geopolitical gamechanger,” Gal Luft, executive director of the U.S.-based Institute for the Analysis of Global Security, wrote in Haaretz Sunday.
“Altogether the basin the eastern Mediterranean … could contain an amount of gas equivalent to one-fifth of U.S. natural gas reserves.”
Lebanon's Nabih Berri
(AFP) BEIRUT — Lebanese parliamentary speaker Nabih Berri on Wednesday urged his government to begin exploring offshore natural gas reserves, warning that neighboring Israel planned to lay claim to the prospective resources.
“Lebanon must take immediate action to defend its financial, political, economic and sovereign rights,” said Berri, who has submitted a bill to launch exploration of potential offshore reserves.
“Exploring our options in this field is our best bet to pay off Lebanon’s debts,” he told reporters.
Lebanon’s national debt, among the highest in the world, currently stands at more than 50 billion dollars (41.6 billion euros), equivalent to some 148 percent of GDP.
“Israel is racing to make the case a fait accompli and was quick to present itself as an oil emirate, ignoring the fact that, according to the maps, the deposit extends into Lebanese waters,” he said.
In a statement on its website, Norway-based Petroleum Geo-Services recently announced it had explored Lebanese waters which contained “valuable information” on potential offshore gas reserves in coordination with the Lebanese energy and water ministry.
And US-based Noble Energy said on its website that it had discovered enough natural gas at the Israeli Tamar and Dalit offshore fields to meet Israel’s needs for years.
It also announced the Leviathan prospect, offshore Israel in the Rachel and Amit licenses, as its next planned exploration target in the region in the fourth quarter of 2010.
Lebanon and Israel remain technically in a state of war and have no diplomatic ties.
Noble Energy’s natural gas discovery off of Israel’s northern coast has changed Israel’s energy future. Noble’s Tamar field now has estimated gas reserves of 5 trillion cubic feet and an estimated daily production rate of 30 – 150 million cubic feet per day. This field alone is enough to power Israel’s energy needs for the next 20 years.
Because of the infrastructure required to transport the offshore gas to market, production won’t be online until 2012. But that time frame coincides with Israel converting the country’s oil and coal fired electrical generating plants to natural gas. Even then, Israel should have enough natural gas to become an energy exporting nation.
Energy trouble is already brewing with Israel’s neighbors. Israel has also taken a tremendous amount of world criticism by not buying natural gas from fields off the Gaza coast and blocking the sale of Gaza gas to Egypt because they know that at least some of the money from Gaza gas sales will go into funding further Hamas arms purchases. By buying Gaza gas, Israel would, in effect, be funding Hamas terrorism.
Now, Reuters reports Lebanese official, Mohammed Kabbani stating, “‘Noble Energy’s find proves that the (Lebanese) shore is rich in gas and that there is a possibility that we have a common basin, between Lebanon and the Occupied Palestinian territories ….’ [H]e feared that Israel ‘can extract mounts of gas from the depths of Lebanon’s territorial waters if there is a common gas basin. If that basin extends to Lebanese waters, then we want to warn this company from infringing on our rights,’ Kabbani said, adding the parliamentary committee had requested the government take action.”
(full article)Notice Kabbani’s use of “Occupied Palestinian territories” rather than ‘nation of Israel’. If Israel’s neighbors won’t even recognize her right to exist, what makes us think they will recognize Israel’s right to her own gas and oil discoveries? When Israel discovers oil on-shore, I guarantee you, the anti-Israel world will claim the discovery is an encroachment on ‘Palestinian’ resources and demand that Israel cease production (which, of course, she won’t do) until a world court can ’sort out’ who is really entitled to the oil. Israel is accustomed to the neighbors claims that she is squatting on her own land and she is growing accustomed to world opinion continually biased against her. But the oil and gas within her geographical boundaries and territorial waters are a part of the inheritance G_d gave her father Jacob, and that inheritance does have an expiration date. Complaints and false claims against Israel have been a part of her reality since May 14, 1948; they’ll increase exponentially on the day she becomes energy rich, that’s a given. Israel must and will stand firm in the midst of blessing as she always has in the midst of struggle. We must stand with her.
Zion Oil drilling at the Ma’anit Rehobeth #2 reaches beyond 12,000 feet. Zion reports that, as of quitting time Thursday, their drill bit was at 12,630 feet – 1310 feet deeper than the last report. In the 2005 Ma’anit #1 well Zion began seeing hydrocarbon shows at 12,000 feet. Zion’s full report is below.
Zion's Aaron Kahn
| Dear Shareholder and/or Friend of Zion…
Drilling Operations on the Ma’anit-Rehoboth #2 Well
In previous emails, I have highlighted the 2,000 horsepower drilling rig and rig crews, from Turkey, the 5-person directional drilling team from Italy and our drilling supervisor from Texas. Continuing with the theme of the equipment and people involved in drilling our well, this week I would like to bring into the limelight Zion’s mud logging unit and also one of Zion’s geologists, Aaron Kahn.
Aaron is from Columbus, Ohio and qualified as a Geologist at the School of Earth Sciences, Ohio State University. He is a member of the American Institute of Professional Geologists, the American Geophysical Union and the Israel Geological Society. Aaron lives in Israel and is currently in charge of our mud logging unit. He studied Well Log Analysis at the Colorado School of Mines and Mud Logging in Houston, Texas. The photograph above, taken last week, shows Aaron in the mud logging unit, next to the drilling rig, at the Ma’anit-Rehoboth #2 drilling site.
During the drilling of a well, a drilling fluid, called ‘drilling mud’, is used. The drilling mud consists of water and bentonite (a type of clay that will stay suspended in water) together with some (non-toxic) chemicals.
The drilling mud is stored in mud tanks on the ground beside the rig and using mud pumps, the mud is pumped through the drill string where it sprays out of nozzles in the drill bit, cleaning and cooling the drill bit in the process. The mud then carries the rock “cuttings” up to the surface where the cuttings are then filtered out and the mud returns to the mud pits.
The drilling mud not only cools and lubricates the drill bit and removes rock cuttings from the well, but also controls the formation pressures and powers the downhole motor.
The mud logging unit is a mobile laboratory at the well site and contains the scientific equipment required to examine drill cuttings under a microscope and produce a ‘mud log’, (a compilation of the drilling parameters and description of the well cuttings including any traces of gas and oil, as the well is being drilled).
After the drilling phase, the mud log can be used, along with the other scientific data, to help with appraisal and evaluation of the well.
Drilling Progress Report
Here is (weekly) Progress Report #4, for the week ended Thursday, June 4, 2009. The Report is from Zion’s President and Chief Operating Officer, Glen Perry.
“As I mentioned last week, the remaining drilling operations on the Ma’anit-Rehoboth #2 well can be divided into five steps:
(1) Drilling directionally into the Triassic formation, a depth of approximately 15,400 feet (4,750 meters).
(2) Appraisal and evaluation of the Triassic formation using electrical wireline well logs.
(3) Setting and cementing casing at that depth.
(4) Drilling deeper to the Permian formation, a depth of approximately 18,000 feet (5,500 meters).
(5) Appraisal and evaluation of the Permian formation using electrical wireline well logs.
This past week we have continued drilling towards our Triassic formation target. We have now reached a depth of approximately 12,630 feet (3,850 meters).
The drilling is going very well indeed. To date, our maximum drilling rate has been approximately 35 feet (10.7 meters) per hour and we have been averaging approximately 15 feet (4.6 meters) per hour.
Rights Offering
Our ability to reach the deep Permian formation is dependent on us raising further funds, so we are holding a Rights Offering. Anyone who was a stockholder on the record date of May 4, 2009, has the right to purchase some more Zion stock at $5.00 per share of stock.
If you are a stockholder, I hope you will exercise your rights to purchase Zion stock at $5.00 and even consider an over-subscription.
Please be aware that the rights offering is set to expire on June 10, 2009. Although we may, at our discretion, extend that expiration date, if you do want to exercise your rights before they expire, don’t wait until it is too late.
Proxy
Finally, if you have received a Proxy voting form, it would help us if you would vote. You can vote by internet, by telephone or by mailing the completed form, so please take two minutes and make your vote count.
Psalm 51:18 – In your good pleasure, make Zion prosper…
Thank you for your continued support of Zion, and
Shalom from Israel
Richard Rinberg
CEO of Zion Oil & Gas, Inc.
www.zionoil.com
|
|
| FORWARD LOOKING STATEMENTS: Statements in this communication that are not historical fact, including statements regarding Zion’s planned operations, drilling efforts and potential results thereof and plans contingent thereon, are forward-looking statements as defined in the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward looking statements are based on assumptions that are subject to significant known and unknown risks, uncertainties and other unpredictable factors, many of which are described in Zion’s periodic reports filed with the SEC and are beyond Zion’s control. These risks could cause Zion’s actual performance to differ materially from the results predicted by these forward-looking statements. Zion can give no assurance that the expectations reflected in these statements will prove to be correct and assumes no responsibility to update these statements.
Zion Oil & Gas, Inc. has filed a registration statement (including a prospectus) with the SEC for the rights offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about Zion Oil & Gas and its offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, Zion Oil & Gas will send you the prospectus if you request it by calling toll free 1-888-TX1-ZION (1-888-891-9466).
The securities are offered by prospectus only, and only within those States and other jurisdictions in which the securities may be sold, and this announcement is neither an offer to sell nor a solicitation of any offer to buy in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities of any such state or jurisdiction.
More information about the offering is available at www.zionoil.com. A copy of the prospectus can be obtained on request, by calling toll free 1-888-TX1-ZION (1-888-891-9466) or by contacting Kim Kaylor at Zion Oil & Gas, Inc., 6510 Abrams Rd., Suite 300, Dallas, TX 75231; telephone 1-214-221-4610; email: dallas@zionoil.com |
|
