Will Israel gas Europe with the new fields?
The role of the Leviathan and Tamar gas fields in Israel. Here because. Marco Orioles's article
Hungry for natural gas from countries other than Russia, Europe would do well to pay attention to what is happening in Israel, where the Leviathan and Tamar fields have recorded a record increase in production and exports which, in perspective, given also the considerable reserves lying in those basins represent a promising anchor of salvation for the energetic Old Continent.
Record increase in production
It is a detailed article by Al-Monitor to inform us about the numbers and indicators exhibited by the Israeli fields in the first half of 2022 which are truly remarkable, both in terms of overall production deriving from the exploitation of Leviathan and Tamar, both in terms of revenues and it gets the government and profits from investors.
Overall, 10.85 billion cubic meters of gas were produced in Leviathan and Tamar in the first six months of this year, an increase of 21.9% compared to the same period in 2021, when production was at 8 , 9 billion cubic meters.
This significant production has made it possible both to strengthen the flows directed to internal needs, which in the period considered reached 6.26 billion cubic meters, and the part to be destined for export, which has grown to 4.59 billion meters. cubes and for now mainly intended for regional markets such as Egypt and Jordan.
Boom in state revenues
The increase in the production and sale of Israeli gas has obviously had a positive effect on the revenues from royalties.
According to data released by the Department of royalties of the Ministry of Energy, and also relating to the first half of 2022, the proceeds jumped forward by 48%, having reached 250 million dollars against the 165 collected in the same period of 2021. Furthermore, Al-Monitor points out, the favorable dollar exchange rate has further reinforced this trend.
The investments developed in its fields have proved to be extremely profitable for Israel: according to data from the Ministry of Energy, since 2004 the state has collected almost three billion dollars in royalties.
But, as Amir Foster, executive director of the Israeli Natural Gas Trade Association points out, the cash flows for the state were higher, considering that royalties represent only one of the three forms of levy on gas receipts (the other two are the income tax of the companies owning the fields and a special additional tax on oil and gas). From all these three sources, the state, according to Foster, would have grossed $ 5 billion.
The forecasts that Foster makes for the future can only be defined as rosy, with revenues that will reach a monthly amount in the range of 202 to 237 million within five years.
The importance of Leviathan and Tamar
The Leviathan field alone, the largest in Israel, made it possible to collect $ 137 million in royalties thanks above all to an increase in production which in the first half of 2022 reached 5.62 billion cubic meters, equal to an increase in 27.5% compared to the same period last year.
As much as 68% of the total production of Leviathan was destined for export, which represents 77.4% of the total royalties collected by the state.
Very important data are also recorded on the front of the Tamar field. Here the increase in production has even reached 53.8%, while royalties are booming, which have reached 111 million dollars for an increase of as much as 85%.
Significant increase in profits
The results of the flourishing production activity recorded in the Israeli fields are also measured by the corresponding increase in investor profits.
In this case, the indicator proposed by Al-Monitor are the results of the second quarter for NewMed Energy, which controls Leviathan for 45.34%: subtracting the royalties, the profits of the Company recorded an increase of 32%, since corresponding to a figure in dollars equal to 249 million, to be compared with the 189 million earned in the same quarter last year.
Overall, in the first half of 2022 NewMed Energy generated revenues of $ 460 million, an increase of 23% compared to the first half of last year.
Future prospects: a signal for Europe
The plans of the companies that control the Israeli fields move towards a further expansion of production to meet the growing global demand for natural gas. And here a stock market analyst consulted by Al-Monitor sees very attractive prospects for Europe.
According to the analyst in question, Israel is about to take a "sensational step forward". In the next six months, decisions will be taken relating to the start of phase B of the Leviathan development, which will allow to pass from the current maximum production threshold of 12 billion cubic meters per year to around 21-22 billion.
These substantial increases offer numerous opportunities in terms of exports. Whoever grabs Israeli gas will be able to count, among other things, the analyst points out, on the stability of supplies, in consideration of the presence of substantial reserves estimated at 1,000 billion cubic meters, only half of which are destined for internal consumption.
With an annual consumption of 12 billion cubic meters, Israel sees its energy needs guaranteed for many years to come. But also for Europe, the Israeli fields could represent an important piece of its supply strategy, given that, the analyst notes, "within a few years … Israel will be able to ensure about 10% of gas consumption in the continent".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/israele-gas-giacimenti-leviathan-tamar/ on Fri, 16 Sep 2022 06:57:25 +0000.