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Exxon has plans to enter the Israeli natural gas exploration industry despite the country’s tense relations with its Arab neighbors where Exxon has an established presence, Reuters reports, citing a source with knowledge of the plans.
According to the source, Exxon officials had talked with Israeli Energy Minister Yuval Steinitz on the sidelines of CERAWeek in Houston, focusing on an offshore oil and gas auction that Israel has scheduled for this June.
Israel made several major gas discoveries offshore during the last decade, but only one of them, Tamar, is already producing. Another large field, Leviathan, is close to completion, with first gas flowing into the market in late 2019, according to a November 2018 Reuters report.
The Tamar field contains an estimated 281 billion cu m of natural gas and some 13 million barrels of condensate, according to field operator Delek Group. Delek partners on Tamar’s development with Noble Energy, which holds a 25-percent stake.
Delek and Noble Energy are also the lead partners on the Leviathan project, which Steinitz earlier this year called “the greatest natural treasure that has been discovered in Israel.” The field holds about 535 billion cu m of natural gas as well as 34.1 million barrels of condensate.
Israel has grand ambitions in the gas industry thanks to these discoveries and has been eager to tap more reserves. It has already struck a sizeable gas export deal with an Egyptian firm, but it may just be the start of its growth as a regional factor to reckon with in gas.
This may put Exxon in an interesting position with its partners from the Arab countries, but the risk is relatively small: local oil and gas producers have benefited from the know-how supplied by Exxon and the other Big Oil majors for long enough to risk losing it.
However, there is no certainty there will be another Leviathan-sized discovery any time soon. The 2017 oil and gas block tender that Tel Aviv held was disappointing and hopes are now that the next round, to cover 19 blocks, will have better results.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.