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Iran's Oil Tanker Leverage Game

Iran's Oil Tanker Leverage Game

The geopolitical tug of war…

Major Shale Find Could Guarantee Israel’s Oil Supply For Years

Energy geologists estimate that billions of barrels of crude oil are available in shale in the occupied Golan Heights, but will Israel be able to get to it? If it can, the field could make the Jewish state self-sufficient in oil for years.

Afek Oil and Gas, a subsidiary of the U.S. company Genie Energy, had been drilling in the southern Golan Heights for more than a year, and in September announced the discovery of the shale deposit. But the size of the field wasn’t confirmed until Oct. 7.

In an interview with Israel’s Channel 2 News, the company’s chief geologist, Yuval Bartov, said, “We are talking about a strata which is 350 meters thick, and what is important is the thickness and the porosity.”

Related: Is Russia Plotting To Bring Down OPEC?

“On average in the world strata are 20-30 meters thick,” Bartov said, “so this is 10 times as large as that, so we are talking about significant quantities. The important thing is to know the oil is in the rock and that’s what we now know.”

So far, Afek has drilled three times into the Golan shale and reported finding huge reserves of crude that could easily meet Israel’s demand for fuel for a long time. The country now uses about 270,000 barrels of oil every day.

But exactly how much oil is trapped in the rock isn’t yet known. One unknown is whether extracting the crude would be profitable, given the relatively high cost of shale extraction, usually by hydraulic fracturing, or fracking, at a time when oil prices remain stubbornly low.

Related: Can The Panama Canal Fulfill Its Global LNG Promise?

Another hurdle is resistance from Israeli environmental groups. They and residents of the Golan Heights have strenuously opposed the exploratory drilling that’s already taken place, saying exploiting an oil field there could be harmful to regional wildlife and their habitat. As a result, any drilling is expected to face delays.

Further, most nations, including the United States, regard the Golan Heights as occupied territory, calling into question Israel’s right to exploit the region as if it were sovereign territory. Israel captured much of the Golan from Syria during the 1967 Six-Day War with its Arab neighbors. Damascus has consistently demanded that the territory be restored to Syrian control.

Israel is often perceived as an energy desert in the Middle East, a region of nations that have become rich on their huge oil and gas reserves. But in the past 15 years two gas fields, Tamar and Leviathan, have been discovered in the Mediterranean Sea off the Israeli coast and now are being tapped. They’re estimated to be among the largest such deposits in the world.

Related: Why Venezuela’s Petro-Aggression In Guyana Is Being Largely Ignored

Now, with the discovery in the Golan Heights, Israel may also be able to develop a thriving oil industry. Since the country was founded in 1948, energy companies have drilled more than 500 exploratory wells, but only a few have proved to be commercially successful.

The find has elated Afek’s Bartov. “There is enormous excitement,” he told Channel 2 News. “It’s a fantastic feeling. We came here thinking maybe yes or maybe no, and now things are really happening.”

By Andy Tully of Oilprice.com

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