Tamar Offshore Field Promises Even More Gas Than Expected

The Tamar field off the Haifa coast promises 16% more natural gas than had been estimated earlier, and could reach 207 BCM (billion cubic meters), the exploration partners reported yesterday.

Earlier estimates upon completing the verification survey of the Tamar 2 site last month had indicated a potential of 178 BCM.

With this news, Psagot investment house has raised the value of the field from $4.3 billion to $4.55 billion, based on $5.3 million per million British thermal units.

Expert surveys conducted by the U.S. petroleum consultants Netherland, Sewell & Associates indicate that the field contains proven reserves of 170 BCM, while it's gross mean resources (based on probability calculations) could reach up to 217 BCM once the development plan has been formulated - meaning there is a 90% probability that the field contains this amount of gas. This figure forms the basis for the project's financing.

Top energy experts noted some six months ago that the exploration partnership had chosen to adopt conservative estimates in their reporting from the field, and that the actual reserves in the Tamar undersea reservoir were estimated at some 200 BMC - at a time when the two existing drill sites at the Tamar field covered only 70% of the reservoir's potential.

Geologist Joseph Langotsky, who initiated the project, agreed with other geologists' estimates at the time which predicted dramatically higher quantities than those initially reported.

"The unbiased expert report confirms the unusual size and quality of the Tamar field," says the chief executive of Delek Energy and Avner Oil Exploration, Gideon Tadmor. "The recent discoveries of natural gas at the Tamar and Dalit sites are a strategic asset for the state of Israel and its energy market, and relieve Israel of its dependence on foreign entities."

The proven reserves indicated in NSAI's reserve certification, along with the results of the extraction tests pointing to a production potential of 150 million cubic feet per day, are expected to speed the process of raising the financing necessary to develop the reservoir. The Israeli government has demanded that a pipeline between the natural gas reservoir and the northern area of the country be included in the development plan. The exploration partners are seeking state assistance to raise financing for the project's development by 2012. The cost of development has been estimated at between $2 and 2.5 billion.

Tamar is a joint venture of the American company Noble Energy (36%), Isramco (28.75%), Delek Drilling (15.625%), Avner Oil Exploration (15.625%) and Dor Gas (4%).