Israel Oil and Gas Report

 Published On: Sep, 2016 |    No of Pages: 81 |  Published By: BMI Oil and Gas | Format: PDF
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BMI View: The recent approval of Israel's highly-contentious natural gas framework is fostering activity in the country's upstream sector. Israel has already announced plans to auction up to 24 new offshore blocks by the end of 2016, while the country's flagship Leviathan gas project is seeing progress with its development plan being approved in June. In light of these developments, we hold our view that a lasting regulatory stability and successful implementation of Israel's new gas framework will be crucial for the development of the country's prospective gas industry.


Latest Updates and Key Forecasts

-On 22 May 2016, Israel's government approved the revised offshore gas plan, aiming to partially break up the offshore gas monopoly of Noble and Delek and establish a greater regulatory stability in the upstream sector. Importantly, a compromise has been found on the highly contentious 'stability clause', which is expected to foster exploration and development of major gas projects.

-Israel is looking to auction up to 24 new offshore blocks by the end of 2016. Despite the resource potential, we see only marginal interest from companies with sufficient offshore knowledge and experience.
In August 2016, a Cypriot energy company Energean agreed to buy Israel's Tanin and Karish offshore gas fields from Delek for USD148.5mn. Within the six months from this date, Energean is expected to submit development plans for the two fields.

-In June 2016, US-based Noble Energy received an approval from the Israeli authorities for its development plan for the Leviathan field. The development costs of phase one are estimated at USD3.5-4.0bn and the first production is slated for 2019.

-As a part of Tamar field expansion, Delek and Noble expect to spud Tamar 8 well in Q4 2016. Total net expenses are valued at USD228mn. In the meantime, Noble has agreed to divest 3% of its working interest in Tamar field to the Israel-based Harel Group for USD369mn.
BMI Industry View ............... 7
Table: Headline Forecasts (Israel 2014-2020)............. . . 7
SWOT .... 9
Oil & Gas SWOT ....... 9
Industry Forecast .............. 11
Upstream Exploration .............. 11
Latest Updates ....... 11
Structural Trends ... 11
Table: Fiscal Conditions in East Mediterranean............12
Upstream Projects ... 15
Table: Key Upstream Projects In Israel.............. 15
Upstream Production - Oil ........ 18
Latest Updates ....... 18
Structural Trends ... 18
Table: Oil Production (Israel 2014-2019)............. . . . . . . 20
Table: Oil Production (Israel 2020-2025)............. . . . . . . 20
Upstream Production - Gas ....... 21
Latest Updates ....... 21
Structural Trends ... 21
Table: Tamar Project Gas Sales Agreements............. . . . 23
Table: Letters Of Intent To Supply Leviathan Gas............ . . . . . 24
Table: Gas Production (Israel 2014-2019)............. . . . . . 25
Table: Gas Production (Israel 2020-2025)............. . . . . . 25
Refining . 26
Latest Updates ....... 26
Structural Trends ... 26
Table: Refining Capacity And Refined Products Production (Israel 2014-2019)........ . . . . . . 28
Table: Refining Capacity And Refined Products Production (Israel 2020-2025)........ . . . . . . 28
Refined Fuel Consumption ........ 29
Latest Updates ....... 29
Structural Trends ... 29
Table: Refined Products Consumption* (Israel 2014-2019)........... . . . 31
Table: Refined Products Consumption* (Israel 2020-2025)........... . . . 31
Gas Consumption .... 32
Latest Updates ....... 32
Structural Trends ... 32
Table: Gas Consumption (Israel 2014-2019)............. . . . 34
Table: Gas Consumption (Israel 2020-2025)............. . . . 34
Trade - Oil ............. 35
Latest Updates ....... 35
Structural Trends ... 35
Crude Oil Trade Outlook ......... 35
Table: Crude Oil Net Exports (Israel 2014-2020)............ . . . . . . 36
Table: Crude Oil Net Exports (Israel 2020-2025)............ . . . . . . 37
Refined Fuels Trade Outlook .... 37
Latest Updates ....... 37
Structural Trends ... 37
Table: Refined Fuels Net Exports (Israel 2014-2019)............ . . 38
Table: Refined Fuels Net Exports (Israel 2020-2025)............ . . 39
Trade - Gas (Pipeline And LNG) 40
Latest Updates ....... 40
Structural Trends ... 40
Table: Potential Leviathan Gas Deals.............. . . 42
Table: Leviathan Export Possibilities.............. . . 43
Table: Gas Net Exports (Israel 2014-2019)............. . . . . 44
Table: Gas Net Exports (Israel 2020-2025)............. . . . . 45
Industry Risk Reward Index ............. 46
Middle East - Oil & Gas Risk/Reward Index . 46
Table: Middle East Oil & Gas Risk/Reward Index............ . . . . . 46
Upstream: Index Resilient In Lower Price Environment 47
Table: Middle East Upstream Oil & Gas Risk/Reward Index........... . . 47
Downstream: Limited Opportunities .......... 49
Table: Middle East Downstream Oil & Gas Risk/Reward Index.......... . . . . . . 49
Israel - Risk/Reward Index ........ 52
Market Overview ............... 54
Israel Energy Market Overview .. 54
Regulatory Structure ............... 54
Fiscal Regime ........ 54
Table: Key Petroleum Taxes............... . . . . 54
Licensing Regime ... 55
Oil And Gas Infrastructure ........ 55
Oil Refineries ........ 55
Table: Israel - Refineries...............56
Oil Pipelines ......... 56
Table: 750km Of Pipelines............... . . . . . . 56
Oil Terminals ........ 57
Table: 3.7mn Cubic Metres Of Storage Capacity............ . . . . . . 57
Gas Storage .......... 57
Gas Pipelines ........ 58
Competitive Landscape .... 59
Table: Key Players - Israeli Oil And Gas Sector............ . . . . . . 60
Table: Key Downstream Players..............61
Company Profile 62
Noble Energy .......... 62
Table: Major Upstream Assets In Israel.............. 63
Regional Overview ............ 64
Middle East Oil & Gas Regional Overview ... 64
Oil Production: Output On Upward Trajectory ............ 64
Oil Consumption: Gas And Subsidy Reform Tempering Demand ..... 67
Table: Gasoline-95 Pump Price June 2015 & March 2016 (USD/Litre)......... . . . . . . 67
Refining Capacity: Mega Refineries To Outcompete ..... 69
Gas Production: Upstream Focus Swaying To Gas ....... 70
Gas Consumption: Industrial Growth And Power Drive Demand .... 72
Table: Middle East Oil & Gas Production, Refining Capacity & Trade.........73
Glossary ............. 74
Table: Glossary Of Terms............... . . . . . . 74
Methodology ...... 76
Industry Forecast Methodology 76
Source . 78
Risk/Reward Index Methodology ............... 78
Table: Bmi's Oil & Gas Upstream Risk/Reward Index............ . 80
Table: Weighting................81
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