The Wall Street Journal reports:
Two years ago, Ratio Oil Exploration LP, an energy firm here, employed five people and was worth about half a million dollars.
Today it sits at the center of a gas bonanza that has investors, international oil companies, Israeli politicians and even Hezbollah, Israel’s sworn enemy, clamoring for a piece of the action.
Ratio’s market capitalization now approaches $1 billion. The rally at Ratio is thanks to the company’s 15% stake in a giant offshore gas field called Leviathan, operated by Houston-based Noble Energy Inc.
On Wednesday, the frenzy got fresh fuel: Noble confirmed its earlier estimates that the field contains 16 trillion cubic feet of gas—making it the world’s biggest deepwater gas find in a decade, with enough reserves to supply Israel’s gas needs for 100 years.
It’s still early days, and getting all that gas out of the seabed may be more difficult than it seems today. But Noble and its partners think the field could hold enough gas to transform Israel, a country precariously dependent on others for energy, into a net-energy exporter.
Such a transformation could potentially alter the geopolitical balance of the Mideast, giving Israel a new economic advantage over its enemies.
As the story reads, “It’s still early, and getting all that gas out of the seabed may be more difficult than it seems today”. I wouldn’t bet the farm on this one, especially with the situation that exists in Israel as it is today. Until total Peace can be achieved there, it’s very doubtful that the infrastructure can be built that won’t be subject to sabotage by those who are not included in the sharing of the profits. What is being forgotten here, is the climate of cooperation really doesn’t exist to successfully implement the build out that’s required. Only those with extreme tunnel vision or blinded by promises of great profit, like the C.I.A.’s announcement that Afghanistan holds vast quantities of Mineral wealth. It sure seems to have attracted investors money, but so did the recent Ponzi King.
I read about this gas field back in the summer and so when I saw this extract about it being confirmed to hold 16 trillion cubic feet of Gas I remembered it and my heart sunk. Since this is War In Context I will add some more context to the story and why things could get dangerous as a result.
This Gas field is in fact not only in Israel (it is a huge Gas field running from offshore Gaza, up through Israels territorial waters into Lebanese waters and ending in Cyprus and Northern-Turkish controlled Cyprus) So imagine the geopolitical nightmare sorting this out will be. Oh and did I mention the gas company with rights to exploit the field is an American company?
The piece I read on this gas field over the summer can be found on the LA Times blog
http://latimesblogs.latimes.com/babylonbeyond/2010/06/israel-lebanon-.html
This article also has a map of the area and field as well as a rundown of the threats already passed by Israel and Lebanon on the field and how both sides will not hesitate to use the military to protect “their” field.
http://money.blogdig.net/archives/articles/December2010/29/Leviathan_Gas_Field_Could_Bring_Catastrophe_or_Opportunity_to_Israel_Lebanon_Cyprus_Borders.html
Foreign Policy site also has some of the coverage on it.
http://oilandglory.foreignpolicy.com/posts/2010/07/02/israel_versus_lebanon_hydrocarbons_edition
that’s all we need! Israel has already arranged to steal the oil belonging to Gaza; now it will have an excess. What a pity it does not think of sharing, or making peace with its neighbours and treating its indigenous population like humans. Will it ever be satisfied?
I seem to remember there was some dispute over these gas fields…or is this a different field than the one that was talked about 3 years ago?
The dispute involved “slant drilling” which is illegal unless you are slant drilling on your own land…..it’s illegal for the purpose of preventing someone from slanting into your property or fields to extract your gas or oil from their ajoining property.
Maybe this is a different field but the deal on the one I saw fell thru due to the dispute and the British company that was suppose to to do the deal for israel backed out because of it.
Anyone know more about this?
Never mind….here’s the first dispute
UPI..
“The potential at Leviathan follows the 2009 discovery of the Tamar gas field off the Israeli coast, which holds around 8 trillion cubic feet of gas.
Lebanon contends that a portion of Leviathan lies within its maritime borders.
This new one is 80 mi off shore of Haifa..I don’t have a map in front of me but the buzz is this will be slant drilled……hummmm.
Still I don’t think I would be investing in any gas exploration with Israel.
This is probably more like reality….
East Med gas bonanza has many perils
Published: Dec. 31, 2010 at 7:31 PM
BEIRUT, Lebanon, Dec. 31 (UPI) — Confirmation that the Leviathan natural gas field off Israel contains reserves of at least 16 trillion cubic feet, the largest gas discovery of the decade, could trigger an exploration boom across the eastern Mediterranean, but those who take part face many perils.
Leviathan, and three other gas fields found off Israel, lies on a continental shelf that runs from Syrian waters at the extreme end of the eastern Mediterranean, through Lebanese and Israeli waters to the Palestinian-ruled Gaza Strip and Egypt, which is already a gas exporter.
Israel, with whom Egypt signed a landmark peace treaty in 1979, the first between the Jewish state and an Arab neighbor, is one of Cairo’s main gas customers.
The U.S. Geological Survey reported earlier this year that the Mediterranean’s Levantine Basin, covering around 32,000 square miles, could hold 122 trillion cubic feet of recoverable gas — that’s around half the United States’ proven gas reserves — and around 1.7 billion barrels of oil.
The problem is that these riches, lying up to 3 miles beneath the seabed, are inextricably woven into the seemingly intractable conflicts that plague the region, especially the Arab-Israeli struggle that now encompasses Iran as well.
If gas is found in sufficient recoverable quantities off Syria, one of Israel’s most implacable foes and a key Iranian ally, that could have a major impact on the geopolitical landscape in the Middle East.
Lebanon, once again under the influence of Syria, has already claimed that the Leviathan field runs into its waters.
The Iranian-backed Hezbollah, also supported by Syria, has warned it won’t permit the Jewish state to plunder Lebanon’s maritime assets.
Israel says it will use military force to defend its newfound gas fields, which if estimates of their size are correct could provide the Jewish state’s energy needs for the next 100 years as well as transform the traditionally energy-poor state into a significant exporter of gas.
Iran, seeking to expand its influence into the Levant, has already offered to help the Lebanese develop their potential energy wealth.
So have the Russians, further complicating the geopolitical scrimmage that’s developing over Israel’s gas bonanza.
Whether foreign companies are prepared to risk investing in such a violence-prone region is questionable, particularly since Israel’s adversaries don’t want to see it strengthened by its newfound energy wealth at the expense of its neighbors.
The Palestinians, struggling to achieve an independent state in land still occupied by Israel, found gas off the Gaza Strip in 2000.
But Ariel Sharon, who became Israel’s prime minister in February 2001, refused to allow them to develop the find, dubbed the Gaza Marine Field, which was awarded to the Palestinian Authority under the 1993-94 Oslo Accords.
Britain’s BG energy company surveyed the field and estimated it contained at least 1 trillion cubic feet of gas, potentially a big boost for the Palestinians’ resource-poor economy.
Some in Sharon’s government wanted to buy the gas from the PA, since at that time the impoverished, blockaded Palestinians didn’t constitute a large enough market for the gas and probably still don’t.
Israel under Sharon withdrew unilaterally from Gaza in 2005. Two years later, the Islamic fundamentalist Hamas movement it took and claimed the Gaza field.
Israel refuses to recognize the Hamas regime but it might be more flexible if the PA, dominated by the mainstream Fatah movement and Israel’s so-called peace partner, regained control of Gaza.
Another dispute is simmering on the divided island of Cyprus, which lies west of Israel and is also rushing to join the gas bonanza.
It has recently signed maritime zoning agreements with Israel and Lebanon that define their territorial waters.
But Turkey and Greece, both Mediterranean powers and historic rivals, one Christian, one Muslim, are at odds over Cyprus.
Turkey invaded the Greek-majority island in 1974 after a short-lived coup by Greek Cypriot hardliners intended to unite the island with mainland Greece.
The Turks seized the northern one-third of the island and established the Turkish Republic of Northern Cyprus. Only Ankara recognizes it.
Turkey bitterly opposes plans by the Greek Cypriots to explore for oil and gas because any strikes they make aren’t likely to be shared with the TRNC. Turkey plans its own exploration effort.
There is no barrier in the gas field to slant drill through. The gas and oil will adjust to changes in pressure automatically, so that even if Israel drills on its side whilst preventing Gaza from drilling on its side, oil and gas will diffuse to the low pressure side (i.e. towards Israel). Over a long enough period of time, Israel would be able to deplete the whole field without resorting to slant drilling. The rate at which this would happen depends on the structure of the rock below ground, the oil and gas diffusion characteristics and the position of the drilling wells. Initial wells placed closed to the boundary but on the Israeli side would quickly deplete the reserve in the vicinity of the wells, i.e. on both the Israeli side and the Gazan side. I imagine Israel wouldn’t give a flyin fsck but the legality of extraction under circumstances of disputed boundaries may have implications for the drilling companies.
The depth of the field is also interesting, given the BP fiasco in the Gulf of Mexico. Unlike the open waters of the Gulf, the Med is almost totally landlocked, with minimal tides. A repeat of the BP incident would be quite something.
Renfro is right. This is the same field identified over 2 years ago. I have a map of it on my hard drive. Chomsky said that Israel was already exploiting it: ” Israel has already built a horizontal pipeline to siphon off gas from at least one of these fields. It would not be a great surprise if we were to discover some day that this pillage of what could have been a major source of income for Palestine was Israel’s principal motive for Operation Cast Lead.”
d r, good point you bring up. It does make sense too. But, as I’ve said before, the infrastructure will be targeted under the present conditions that exist in Israel & the surrounding Countries. Too bad that the Israeli’s have such short sighted vision, kind of like what the Financial Wizards in the Western World have done. Greed sure has a way of bringing out the worst in all manner of peoples.
Egbert January 1, 2011 at 7:38 am
Thanks for the info on that I don’t know anything about geology so that makes the implications of this deal even clear.
d &N…
I think it may also explain why a tiny outfit like Ratio is involved….usually BP or other major driller would get in this deal….but the big boys don’t appear to be trying to.
I would say if this is the theft it looks like it could be and probably is, it might be the last straw for those in the ME who already see Palestine as plundered.
And well they have been plundered haven’t they.
Every resource Israel has they took from Palestine and without the Jewish State the resoures including the gas would still be theirs.
I almost started to wonder why Palestine hadn’t drilled a long time ago or immediately after the discovery because I am sure they have their own people smart enough to figure it out — but silly me– I forgot Uncle Sugar would bomb or sanction BP or anyone else who tried to assist Palestine.