Posted on 07/05/2013 5:41:53 AM PDT by thackney
Twenty-three years after he got a taste of oil off the shores of Ashkelon, Yossi Levy has unfinished business.
As the head of the government- run Naphtha company in 1988, Levy was part of a team that drilled deep into the Mediterranean Sea and discovered black gold. But the project, which relied on the secret cooperation of US-based Occidental Petroleum at a time when the Arab boycott of Israel was in full swing, hit a wall in 1990.
“They found oil, but they couldn’t continue because the temperature and the pressure were too high and it was impossible to continue drilling,” Levy told The Jerusalem Post on an industrial boat near the old drilling site on Thursday.
Though they squeezed out 800 barrels, he says, as the price of oil dropped, searching for deep-sea oil became a poor business proposition, and the industry turned its attention to natural gas.
“They stopped and they said, ‘Okay, we’ll come back to it in the future,’ but in the future they never came back!” Now, with oil prices back up and significant advances in technology to help overcome the technical difficulties in the exploration, Levy has returned to his old drilling grounds to finish the task he started all those years ago.
In 2011, he signed on as CEO of Shemen Oil and Gas Exploration and commenced drilling in the Yam-3 field in December of the following year.
“I didn’t think I’d come back here, but when the time came I knew this is the project I want to join. I want to find oil in Israel’s waters, so I hope I’ll be the first to find oil,” he said.
To do so, the company pulled in the Atwood Beacon ocean rig. Rising out of the sea 16 kilometers off the Ashdod coast, the rig, which has been dragged from India to South America before coming to Israel, has been drilling since December, though a technical snag along the road halted the process for several weeks (and drove the cost from $22 million to $138m., forcing the company to raise more funds).
Though Levy had drilled 5,300 meters down in the past, “the last 500 meters are always the hardest.”
The 170 degree centigrade underground heat and immense pressure on the pipes do not help. And while the history of oil in the area is a good sign, just finding it will not be enough.
“We’ll find oil, but the problem is its commercial viability: The size, the quantity. At sea you need a minimum quantity to produce. There’s a certain bound under which there is no point in producing, even at $100 a barrel,” Levy said.
An NSAI study commissioned by the company estimates that there are 120 million barrels of oil, a quantity that Levy says could net $20 billion to $24b. in licenses. If nothing goes wrong, drilling should wrap up this month and the results should be in by August.
“I think it’s very important – not just economically, but strategically – to become energy independent,” said Gabi Ashkenazi, a former IDF chief of staff who serves as chairman of the company.
But what if that oil isn’t there? “I try not to think about it,” said Levy. Even if there is barely a drop of oil to be found, there is a chance of finding more of the natural gas that has recently come onto the market.
“What’s wrong with gas?” Levy said with a smile. “Gas [is] good too!”
If Israel can get enough natural gas from offshore shale using fracking techniques or what ever... oil could become less important with this innovative nation. Israel is smart enough and nimble enough to adapt gasoline and diesel engines to products made from natural gas (as opposed to the USA which is moving at a snails pace.
A liquid diesel fuel substitute can be made from natural gas - CH4 > methanol > dimethyl ether (DME). Gasoline engines can be converted to methane (compressed natural gas (CNG) or liquefied natural gas (LNG).
Israel is equipped with the technology and drive and need to adapt ... The USA mired in politics and special interests will lag behind..
At what cost per gallon?
How can $12 billion worth of oil (@ $100/bbl) net $20-24 billion in license fees? Someone lost a decimal point somewhere, methinks.
Thanks thackney. Here’s a little backstory for the current diplomatic melange:
Turkey, Egypt to Drill for Natural Gas in the Mediterranean, Threatening Israel’s Energy Dreams
Oilprice.com | 17/09/2011 | Dr. John C.K. Daly
Posted on 09/19/2011 10:33:47 AM PDT by bananaman22
http://www.freerepublic.com/focus/chat/2780604/posts
I don’t know - the Japanese pursued this for a while. DME is not a perfect substitute ... diesel engines have to be modified ... But for Countries like Japan and Israel - having smaller countries to convert to DME use could be motivated by having a more self-sufficient source of fuel. I used to go to greencarcongress.com for this sort of information. Great resource.
Sasol and Shell are already successful in a different GTL (Gas-To-Liquid) technology. Both have reached a point where their past commercial productions in lower cost countries have made them believe it could be economic in the US.
Creating a fuel that does not require a change in our existing vehicles or delivery infrastructure is likely to be the method with the quickest growth, if economic.
Sasol One Step Closer to Huge U.S. Gas-To-Liquids Plant
http://www.freerepublic.com/focus/f-news/2982330/posts
Shell: world’s biggest gas-to-liquids plant to start soon
http://www.freerepublic.com/focus/news/2731066/posts
I agree with you assessment ... bottom line - IT can be done ... using technology to rid ourselves of dependence on Mid East oil... The USA is or will be overflowing with Natural Gas - I live in a county having 4000 active gas wells ...
It doesn’t matter the technology as long as it works and is cost efficient ...
The biggest problem is obama and his EPA and other Control Freaks...
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