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October 9, 2015 / 26 Tishri, 5776
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Posts Tagged ‘oil’

Huge Oil Discovery on the Golan Heights

Wednesday, October 7th, 2015

Syrian rebels, the Islamic State (ISIS) and the Assad regime, and today that means Russia, now have another reason to capture the Golan Heights – oil.

Drilling that began more than a year ago has exposed a huge find of billions of barrels of oil, but it is too early to know if the black gold can be extracted at a price that would make the oil commercially viable.

Afek Oil and Gas chief geologist Dr. Yuval Bartov was quoted by Globes as saying:

We are talking about a strata which is 350 meters thick, and what is important is the thickness and the porosity. On average in the world strata are 20-30 meters thick, so this is ten times as large as that, so we are talking about significant quantities. The important thing is to know the oil is in the rock and that’s what we now know.

The drilling is in the southern Golan Heights, far away from the northern border but several miles from the eastern border. Syria has claimed the entire Golan since it lost the strategic and water-rich area in the Six-Day War in 1967.

If oil can be extracted, it will be a huge bonanza for Israel and an enormous reason for whoever rules in Syria, or for Hezbollah that is fighting with Assad’s forces and is based in Lebanon, to launch a war on Israel. Israel uses approximately 270,000 barrels a day. Billions of barrels of oil would satisfy the country’s need for a long time.

If the oil can be produced at today’s prices, which are the lowest in years, it would generate a huge employment boom. It also would infuriate environmentalists, who have fought oil drilling the Golan Heights and virtually anywhere else in Israel because of damage to the pristine landscape.

Drilling in the Golan Heights was delayed by environmentalists and was resumed last February when the court dismissed their appeal to stop the work.

The read area marks the eastern border with Syria, The black area is the approximate location of the oil drills.

The read area marks the eastern border with Syria, The black area is the approximate location of the oil drills.

Knesset Approves Natural Gas Outline

Wednesday, September 9th, 2015

The Knesset plenum approved the natural gas outline presented to the lawmakers by the government on Monday.

There was considerable concern prior to the vote as to whether parliamentarians would balk at some of the elements of the deal, but as it turned out, it passed with a healthy majority.

“We have improved the outline. It passed the Cabinet and passed the Knesset by an overwhelming majority,” said Prime Minister Binyamin Netanyahu in a statement following the Knesset session. “There is one more obstacle but when I want to achieve something, I achieve it.

“There will be gas for Israel. I want it for the citizens of Israel, to lower the cost of living, to channel vast sums to the state coffers for energy security. This will be achieved. We are moving forward step by step and overcoming one obstacle after another.

“They told us at the outset: We have not seen the outline so we opened the outline. They told us to improve it; we improved it. They told us to submit it to the Cabinet; we did so and it was approved. They told us to submit it to the Knesset and we approved it by majority vote. Now we have one obstacle left and we will overcome it because it is the right thing for the citizens of Israel.”

Kuwait Says Lebanon, Turkey ‘Better Suited’ for Syrian Refugees

Monday, September 7th, 2015

A Kuwaiti official has cleared up the mystery floating why none of the oil-rich Gulf nations, including Saudi Arabia, have yet allowed the Syrian refugees fleeding the savage civil war in their land to set foot on their shores.

Kuwaiti official Fahad Al Shalami told France24 television in a broadcast interview on Sept. 2 that in fact, the Gulf Cooperation Council (GCC) should never accept Syrian refugees.

Kuwait and the other GCC countries are “too valuable to accept any refugees,” Al Shalami said.

“Our countries are only fit for workers. It’s too costly to relocate them here.

“Kuwait is too expensive for them anyway, as opposed to Lebanon and Turkey which are cheap,” he explained. “These countries are better suited for the Syrian refugees.”

But there is also another, equally important reason the oil-rich nations should not welcome the Syrian refugees, Al Shalami said.

“In the end, it is not right for us to accept a people that are different from us. We don’t want people who suffer from internal stress and trauma in our country!”

Gasoline Prices to Drop by Nearly 5 Percent

Wednesday, August 26th, 2015

The government once again is preventing Israeli motorists from enjoying the full effect of the plunging price of oil and will limit the drop in the price at the pump to 25 agorot midnight Monday.

A hike in the excise tax will rake in another 5 agorot a liter for the Finance Ministry.

The new price of 95 octane will be 6.05 shekels at self-service stations, but discounts often are available at several stations run by smaller companies.

The price of oil has dropped by nearly 20 percent since last month, but the shekel-dollar rate has risen by 2 percent.

The government adjusts the price of gasoline at the pump at the of every month, ostensibly to prevent gasoline companies from charging too much money

In effect, the price control actually guarantees the companies a fat profit, which explains why discount stations cut the rate even further and still make lots of money.

Report: Israel Buying Most of Its Oil from Iraqi Kurdistan

Monday, August 24th, 2015

For a number of months, Israel has quietly been importing more than three quarters of its crude oil from the semi-autonomous northern region of Iraq still controlled by the Kurds, despite some unhappiness from Baghdad.

The remainder is purchased from Azerbaijan, Kazakhstan and Russia, its long-time suppliers.

News of the deals was made public early Monday in a report on the international Financial Times website.

Refineries and oil firms in Israel imported more than 19 million barrels of Kurdish oil between May 1 and August 11, according to satellite tanker tracking data, trade sources and shipping data. Among the trading companies involved in these quiet transactions have been Vitol, Petraco and Trafigura, FT reported.

Total sales for the period at this volume, using international prices, are worth (Israel may have paid) close to $1 billion.

Other customers for Kurdish oil during this period have included Italy, Greece and Turkey. In addition, some 17 percent of exports were shipped to Cyprus, where the oil is then transferred from one ship to another for export “elsewhere.”

But the export of northern Iraqi oil begins with shipping through Turkey’s Mediterranean port of Ceyhan. From May 1 to August 11, more than a third of that was sent to Israel, although some may have subsequently been exported elsewhere.

However, Israel’s domestic consumption levels out at approximately 240,000 bpd (barrels per day).

There have been three benefits to the move, if not more.

First and most obvious, Israel has been able to obtain the crude at a reasonable price due to its geographic proximity. Some industry sources say Israel is receiving a discount from the Kurds, although Kurdistan Regional Government (KRG) officials denied the report.

Second, because Israel invests so much of its consumer dollars in Iraqi Kurdish product, the Kurds have better resources with which to fund their war against Da’esh (ISIS). This is especially important, since it seems that only the Kurds have been able to present a consistent, long-haul effective fighting force against the Da’esh terror machine.

Third, every dollar invested with Iraqi Kurdistan is a dollar that frays the ties between Erbil and Baghdad – or perhaps, the ties between Erbil and Iran. For decades, Baghdad has feared the Kurdish yearning to carve out a free and sovereign state of Kurdistan.

But today one can quite legitimately ask who exactly is in control in Baghdad. Most regional analysts believe the Iraqi government no longer exists, other than to provide a fig leaf for Tehran.

Israel is one of the biggest customers of northern Iraqi / Kurdistani oil at this time. Baghdad still does not recognize the State of Israel. Cash-strapped Kurds, however, are much less concerned about who is buying the oil; their concern is getting money to pay for survival.

“We do not care where the oil goes once we have delivered it to the traders,” a senior Kurdish official was quoted as saying to FT. “Our priority is getting the cash to fund our Peshmerga forces against Da’esh (ISIS) and to pay civil servant salaries.”

Iran Banks on End to Sanctions, Will Raise Oil Production to 1M bpd

Sunday, August 2nd, 2015

Iran is already banking on the passage of the nuclear deal it signed with the U.S. and world powers last month in Vienna. Its government plans to raise its output of oil to one million barrels per day within months after sanctions are lifted, according to Oil Minister Bijan Zanganeh.

In remarks broadcast on Sunday, Zanganeh said, “We are already doing the marketing, and within a day after the lifting of sanctions, we will raise [production] by 500,000 barrels per day.” Within months, he said, production would double to one million bpd.

Much of the current oil production in the Middle East is flowing from Iraqi Kurdistan through Turkey into Europe and elsewhere, although some of the oil still comes from Iran. There may soon be competition from another quarter, however.

Recently the executive director of Russia’s Union of Gas and Oil Industrialists told RIA Novosti, however, that as soon as the situation in Syria is stabilized, Russian oil and gas companies are likely to revive their contracts with that government.

Gissa Guchetl told the newspaper the companies held contracts worth a total of $1.6 billion, that froze their work because of the civil war that has since destroyed that country.

Nevertheless, he said, “If military actions cease and the situation becomes stable … [they] will be ready to renew their activity within a short period of time.” A week ago Guchetl met in Damascus over the issue with Syrian Prime Minister Wael Nadr Halqi and Petroleum and Mineral Resources Minister Suleiman Abbas.

The two Syrians told Guchetl they are interested in Russian companies supplying crude and other oil products to Syria, and in cooperation with Chinese firms to increase oil exploration in Syrian fields that are safe from “rebel attacks.”

Obama Let 40-Year-Old Oil Supply Guarantee to Israel Expire in November 2014

Tuesday, March 17th, 2015

Originally published at Liberty Unyielding

The Obama administration should give lessons in passive aggression.

Eying the impending Israeli election as a political influence operation wasn’t the only thing it was doing in November 2014. It was also letting a 40-year-old strategic guarantee to Israel expire.

The guarantee, which says the U.S. will ensure that Israel has access to oil in case of security emergencies, dates originally to September 1975, when Israel and Egypt were negotiating elements of an Israeli withdrawal from the Sinai after the 1973 War. Throughout those negotiations, which culminated in the 1979 peace treaty, the status of the Sinai oil fields was a core issue. Israel had obtained oil from them since occupying the Sinai after the 1967 War, when an Arab coalition attacked, and Israel seized territory to maintain a defensive perimeter.

The U.S. oil guarantee was instrumental in giving the Israelis a secure basis for withdrawing from the Sinai. The use of the oil fields was one aspect of that dynamic; another was Egypt’s closure of the Suez Canal from 1967 to June 1975. The Canal closure affected trade of all kinds, and specifically had the potential to disrupt Israel’s energy supplies – as effectively, by driving prices up, as they would be disrupted by an actual cut-off.

Because of this dual vulnerability, the U.S. guarantee looks not only at whether Israel is able to obtain oil, but how much it costs her to. The guarantee can kick in for either reason. (It entails ensuring that Israel can buy oil; it’s not a guarantee that the U.S. will supply oil for free.)

A Congressional Research Service study done early in 2014, before the most recent agreement expired, can be found here. It outlines the history of the guarantee. The agreement was formalized in 1979, with an initial period of 15 years, ending on 25 November 1994. It was extended twice after that, each time for 10 years, and most recently expired – without renewal – on 25 November 2014.

Interestingly, Reuters cited an unnamed State Department official on that date claiming that State was “working on” renewing the agreement. It never happened, however, and on 12 March, Senators Lisa Murkowski (R-AK) and Mark Warner (D-VA) sent a letter to John Kerry requesting that he attend to the matter immediately.

It’s not clear what “work” would have to be done to renew this agreement. It is clear, on the other hand, that it’s an agreement that was made for important reasons, and that those reasons are not only still valid: they are more of a concern today than they were 10 years ago. Since the last renewal in November 2004, Israel has pulled out of Gaza; the Arab Spring has thrown the region into tremendous turmoil; the threat of terrorism and guerrilla action in the Sinai has increased; and Iran’s navy has extended its operations dramatically, into the Red Sea and even the Eastern Mediterranean. The potential threats to Israeli trade, and specifically to Israel’s energy imports, have increased significantly since 10 years ago.

Israel has huge reserves of natural gas, but remains dependent on foreign sources for oil. The U.S. guarantee has never had to be invoked, but keeping it in place is far from an academic exercise. The Globes report quotes an Israeli source:

Israel has never invoked the agreement, but Israel sources say that its importance lies in its very existence. An Israeli source compared the oil supply agreement to the loan guarantee agreement between the two countries that enables Israel to obtain commercial loans at low rates of interest. “Israel used the loan guarantee agreement very sparingly, but it is important that the loan guarantees agreement should exist, and the same applies to the energy agreement that guaranteed a regular supply of oil,” the source said, “We never used it, but it’s important that it should lie signed in a drawer.”

Printed from: http://www.jewishpress.com/indepth/analysis/j-e-dyer/obama-let-40-year-old-oil-supply-guarantee-to-israel-expire-in-november-2014/2015/03/17/

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