In what certainly could become an interesting geopolitical twist in a volatile region, Ynetnews.com reported recently that Israel could be sitting on a significant oil reserve. From the Ynetnews.com article:
Could the State of Israel be sitting on an oil reserve that can provide energy, cash flow, and international political influence? This is the question that everyone is waiting to be answered in the engineering report ordered by Givot Olam Oil, overseeing the drilling at the Megged 5 site, next to Rosh Ha’Ayin.
The final report will be submitted on September 5. However, a preliminary report was already issued to Tel Aviv Stock Exchange on the oil reserves on the site. “The amount of oil in place in Rosh Ha’Ayin plot is estimated at 1.525 billion barrels of oil.” In previous reports, the quantity was appraised at only a few hundred barrels of oil a day.
Proven reserves are not necessarily recoverable reserves, as the article mentions, therefore it’s possible that only 10%-20% of the find could actually be pulled to the surface. However, this certainly is big for a nation that was seemingly denied oil wealth in an oil-rich region.
I’m no energy expert, but the idea of oil in Israel just makes sense to me. The old joke in the Israeli energy industry , according to BusinessWeek, is that “when Moses left Egypt, he took a wrong turn on his way to the Promised Land: The Biblical figure should have veered right to Saudi Arabia rather than left to Israel, which has long been assumed to lack any petroleum reserves.” From an energy standpoint, it seems that Moses might have made the right decision after all. Last year, the tiny nation announced a massive natural gas discovery off its coast. From BusinessWeek:
The [natural gas] find, located 90 kilometers due west of the port of Haifa, is the first large field discovered in the eastern Mediterranean and is significant even by global standards. “This is one of the most significant prospects that we have ever tested, and appears to be the largest discovery in the company’s history,” says Charles Davidson, chairman and CEO of Houston-based Noble Energy (NBL), the U.S. partner in the consortium.
Initial estimates put the value of the offshore gas at $15 billion, but experts say the estimate is preliminary and could go substantially higher.
Hydrocarbons in the form of asphalt have been seeping to the surface around the Dead Sea for as long as humans have been inhabiting the area. From Wikipedia:
An unusual feature of the Dead Sea is its discharge of asphalt. From deep seeps, the Dead Sea constantly spits up small pebbles and blocks of the black substance.[10] Asphalt coated figurines and bitumen coated Neolithic skulls from archaeological sites have been found. Egyptian mummification processes used asphalt imported from the Dead Sea region.[11][12]
This should be an interesting thing to watch over the coming years. Israel already has a target on its back, and any significant oil finds would probably make that target bigger. Stay tuned.
-CH
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