The estimated value of the Tamar underwater natural gas field has just been revised to reflect an increase in the proven and expected reserves at 13 percent more than the initial estimate.
In plain English, Tamar is worth a lot more money than initially expected – and it was worth a lot to start with.
A revised report published Sunday (July 2) by Delek Drilling Limited Partnership and Isramco Negev 2 LP that included the Tamar and southwestern Tamar reserves was conducted by independent assessor Netherland, Sewell & Associates (NSAI). The report which included information about the natural gas and condensate reserves in the Tamar prospect, contained an analysis of the geological and engineering information from Tamar 8 drilling as well as other updated data.
Sunday’s report raised the 2016 estimated figures of 282 BCM in proven and expected gas reserves to 318 BCM, and the 2016 estimated figures of 13 million barrels of condensate to 14.6 million barrels.
The Globes business news site quoted a statement by Delek Drilling CEO Yossi Abu, who said, “The revised reserves figures show that the fully geological potential in the Levant Basin has not yet been utilized.
“The Tamar reservoir has made the Israeli economy self-sufficient in energy, but the natural gas revolution in Israel is only beginning. We will continue making natural gas the source of fuel for the electricity sector and Israeli industry, while penetrating new target markets, such as transportation.”
The news is likely to have an eventual impact on Israel’s domestic energy market – in particular, the local price of electricity and possibly natural gas for home use as well.
The board of directors of the Israel Electric Corporation (IEC) ordered the company’s management late last month to renegotiate its gas agreement with the Tamar natural gas reservoir partners in order to find a way to lower the cost.
At present, private electricity producers are paying $4.70 per Mmbtu, as opposed to the $6 rate paid by IEC, which is linked to the US consumer price index – which may even raise the price yet further.
The current contract allows for a readjustment of the price in 2021; however, IEC chairman has told Globes that he wants to roll that back to 2018.
It’s not yet clear whether the Tamar consortium will agree to the readjustment.
