"As CEO, I can't just go a bank and get money," Delek Drilling LP (TASE: DEDR.L) CEO Zvi Greenfeld told a conference of Lahav executive training program at Tel Aviv University yesterday. The conference dealt with Israel's natural gas reserves and their impact on the economy.
Delek Group Ltd. (TASE: DLEKG) subsidiary Delek Drilling is a partner in the Tamar, Dalit, and Leviathan natural gas fields, as well as in Yam Tethys. Greenfeld said, "The Tamar 1 well was the largest natural gas discovery in the world in the past two years, and cost $140 million. If the well was dry, no one would be talking about royalties."
Commenting on Tamar's geology, Greenfeld added, "There are few offshore wells at a depth of 4,900 meters, with good gas quality, and everything was paid for from shareholders' equity, through rights issues to the owners of partnership units who brought their own money; people who love risk."
Greenfeld said, "It's unhealthy to make changes in a living and thriving system. We tried to interest all kinds of large international energy companies, but they didn’t love coming to Israel, with the possible exception of Noble Energy, because every change makes things harder. It's not a coincidence that neither Shell nor ExxonMobil are in Israel. I don’t understand the need to make difficulties when things are already so hard."
As for the wells' potential, Greenfeld said, "We're not sitting on our laurels. We're conducting seismic surveys northeast of the Tamar and Dalit wells, and getting potential of 453 billion cubic meters." The reference is to prospects that have not yet been drilled, not discoveries.
"As public companies, we have to be very cautious, because we've been in the eye of a storm lately," cautioned Greenfeld, but added that the geological probabilities of finding hydrocarbons were very high, at 50%. "This quantity of gas already will not be targeted for use in Israel. Not only will we not have to import gas; we'll turn into exporters, provided that there is a discovery."
Published by Globes [online], Israel business news - www.globes-online.com - on July 29, 2010
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