The ministry claims the gas field encroaches a license that was revoked.
The Ministry of National Infrastructures has delayed its approval for the development of the Tamar SW natural gas field, because it encroaches the area of another license, which was returned to the state. The owners of the gas field – Noble Energy Inc. (NYSE: NBL), Delek Group Ltd. (TASE: DLEKG), Isramco Negev 2 LP (TASE: ISRA.L), and Alon Natural Gas Exploration Ltd. (TASE: ALGS) – submitted a $400 million development plan to the ministry two months ago.
Industry sources fear that a major delay in developing the gas field will harm plans to boost production at the Tamar field in 2015.
The Tamar SW field was discovered in late 2013 by the partners in Tamar, after a $122 million investment in an exploratory well. The field has an estimated 30 billion cubic meters (BCM) of gas, about the same amount as at Yam Tethy’s Mari B field, owned by Delek and Noble Energy.
The Tamar partners want to consolidate the Tamar and the Tamar SW fields via a pipeline to the Tamar gas production network. Gas from Tamar is currently produced by five wellheads, one of which is usually under maintenance at any given moment. A sixth wellhead at Tamar SW will improve the reliability of Tamar’s gas production by operating five wellheads simultaneously, with the sixth wellhead available for peak production.
The Tamar partners want to begin development of Tamar SW immediately, in order to complete the work by mid-2015, when the installation of the compressors in the Tamar pipeline will be finished, which will boost the capacity of the pipeline to the production platform at Yam Tethys by 20%.
However, legal problems cropped up in the discussions between the partners and the Ministry of National Infrastructures, because 20% of the Tamar SW field encroaches the Eran license, which had been owned by Noble Energy, Delek, and Ratio Oil Exploration (1992) LP (TASE:RATI.L). The state revoked the license in August 2013, claiming that the licensees had not begun drilling under the timetable. The companies have appealed the decision in November, arguing that they could have drilled the Tamar SW well from the area of the Eran license, but decided against it for professional reasons.
Minister of National Infrastructures Silvan Shalom has to rule on the appeal.
The Ministry of National Infrastructures said in response, “The issue is under discussion.” Ministry sources said that time is needed to thoroughly and seriously review a development plan.
Published by: www.globes.co.il
