Israel warns firms to drill faster for oil, gas
With gas supplies from Egypt being disrupted due to turmoil in the Sinai peninsula, Israel has been seeking alternative fuels and ways to speed up development of its reserves
Israel Wednesday warned oil and gas companies to speed up exploratory drilling in the Mediterranean Sea so they meet their agreed timetables or risk forfeiting their licenses. While natural gas production is set to soar in Israel following the discovery of two of the world’s largest offshore fields of the past decade, the country faces a scarcity in the short-term and has been scrambling to cover the gap.
“It was decided to demand from companies to carry out exploratory drilling on shorter schedules than had been acceptable until now,” said a statement from the National Infrastructure Ministry, which oversees hydrocarbon exploration. “Failure to comply with the schedule and work program will result in termination of rights,” it said. Israel’s new Tamar and Leviathan fields will not be online until at least 2013, officials say.
With gas supplies from Egypt being disrupted due to turmoil in the Sinai peninsula, Israel has been seeking alternative fuels and ways to speed up development of its reserves. The Jewish state is planning to build an offshore liquefied natural gas terminal for gas imports. Meanwhile consumers have faced sharp increases in electricity rates as a result of the fuel shortages.
Israel in the past has been flexible regarding drilling schedules, but since Tamar was discovered in 2009 and Leviathan in 2010, energy companies have been vying for the rights to explore other blocks in the area.
The ministry said companies that have rights to drill in more than one site must now develop them all at the same time, rather than one after the other. Until now it has allowed companies to use just one drilling rig for various licenses.
The order was given to groups with exploration rights to four blocks whose licenses are due to expire at the end of 2011 or beginning of 2012, the ministry said. It will affect companies including members of the consortium that discovered Tamar and Leviathan.