Partners to drill for oil beneath Leviathan gas find

The four partners in the Leviathan prospect estimate that there is a 17 percent probability of finding reserves equal to 3 billion barrels of oil, and an 8 percent probability of finding reserves equal to 4.2 billion barrels, in a stratum beneath the natural gas field under the Mediterranean Sea near Haifa. 

“The new information revives investors’ dreams of finding oil,” said IBI analyst Guil Bashan. “It is still too early to know whether the findings are commercial.”

The probability estimates were provided at a meeting of the partners on Thursday.

They approved a drilling plan and budget for the Leviathan site located 135 kilometers west of Haifa.

In the first instance, the partners okayed a $150 million budget for exploration at the site, which is estimated to hold 16 trillion cubic feet of natural gas with a 50% probability of geological success.

In the report published on Sunday, the partners announced that the secondary objective of the exploration plan is to drill to lower layers of the Leviathan site, beneath the gas reserve potential, to collect geological data and further examine the economic potential of gas and oil finds.

Current estimates give a 17% chance of discovering reserves equal to 3 billion barrels of oil at a depth of 5,800 meters. In addition there is a probability of geological success of 8% of finding a reserve which is estimated to equal to 1.2 billion barrels of oil at a depth of 7,200 meters.

At the same though, the companies involved in the Leviathan field, including Delek Drilling LP and Avner Oil Exploration LP, cautioned that it was too early to make a decision over drilling wells to access the oil, as further geological testing was necessary.

Drilling at the Leviathan site is scheduled to begin in October and continue for five months.

The partners in the Leviathan site are Noble Energy, which owns 39.66% of the Amit and Rachel licenses forming the Leviathan gas find, Avner Oil and Gas LP and Delek Drilling LP, who each own 22.67%, and Ratio Oil Exploration LP, which holds a 15% stake.

Back in June, Yitzhak Tshuva, controlling shareholder of the Delek Group, which is a partner in the Leviathan prospect through its subsidiaries Avner Oil and Gas LP and Delek Drilling LP, said the site had the potential to make Israel energy independent, and position the country as a gas exporter in coming years with the ability to supply the European market and the Far East.

Bloomberg contributed to this report.