Tamar field promises 30% more natural gas than first estimated

The natural gas reserves at the Tamar 2 drilling site off the coast of Haifa are now estimated to be up to 30 percent greater than expected and may reach 180 billion cubic meters, TheMarker has learned.

This report, which follows a two-month verification survey four kilometers under the sea, could significantly boost Israel's place within the strategic balance of energy resources in the Middle East. The newfound reserves could provide Israel with enough natural gas for another nine years.

In fact, if the findings prove accurate, the Tamar holdings could have the capacity to supply Israel's energy demands for 20 years. The improved forecast also spells approximately another $10 billion for the venture's partners, for a total potential value of $35 billion.

Tamar is a joint venture involving the U.S. company Noble Energy (36%), Isramco (28.9%), Delek Drilling, Avner Oil Exploration, and Dor Gas.

"We can responsibly and certainly state that Israel is independent - independence in blue and white," said Delek owner Yitzhak Tshuva in an interview with Army Radio. "Israel will no longer be dependent on others."

Six months ago, the partnership responsible for drilling at Tamar 1, another offshore drilling site, announced that "extremely significant" reserves of natural gas had been discovered 90 kilometers west of Haifa.

The reserves at that site were then estimated to be at least 142 billion cubic meters.

The electronic logging completed in recent days indicates a larger presence of layers saturated with natural gas than previously estimated by the partners.

Recent headlines about the Tamar discovery have had negative connotations. These have linked MK Haim Katz (Likud) and two other individuals closely involved in professional soccer, with heavy trading in Isramco shares one day before the official announcement of the discovery.

"The new assessment allows us to move forward on development projects," says Gideon Tadmor, chief executive of Avner Oil Exploration. Addressing the possible implications of the new volume estimates on targeted markets, Tadmor said the project's natural market is Israel, although certainly the larger the quantities involved, the more justification there is to investigate the possibility of exporting gas from Israel.

"There are obvious potential markets in the eastern Mediterranean," he said.

Tadmor emphasized the partnership aims to bring the gas to Israeli shores by 2012. The financing is still being addressed, with considerable interest being expressed by foreign banks, while the possibility of state assistance is still being explored.

Eli Misgav, chief executive of Dor Gas, said yesterday the group had not been surprised by the new estimates for Tamar.

"There is a good chance the quantity will increase again in the future," Misgav said. "As data analysis progresses, and we become more knowledgeable, the findings will improve. We are in the middle of a process, and it should be remembered that six months ago we were talking about estimates of 50% less."

Misgav rejected the idea that the latest findings are part of a marketing ploy, and said development plans would be drawn up over the coming weeks.

The success at Tamar drilling joins the discovery of reserves at Dalit, off the coast and west of Hadera, where test drillings have indicated reserves of some 14.2 billion cubic meters of gas.