The Ministry of National Infrastructures has ordered a halt to drilling in the Leviathan structure, after water entered the borehole of the Leviathan 2 well, which aims to verify the presence of natural gas in the structure. A ministry source told "Globes", "We were very lucky that water, not gas, or God forbid, oil, penetrated the borehole, which could have caused a major ecological disaster."
No drilling is currently underway at Leviathan. Drilling of the Leviathan 2 well was due to resume this week
After rising in morning trading, shares in Leviathan's Israeli partners fell sharply on the news. Delek Group Ltd. (TASE: DLEKG) fell 1.2% by mid-afternoon to NIS 764, its units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) fell 2.1% to NIS 2.05 and fell 2.2% to NIS 11.54, respectively. Ratio Oil Exploration (1992) LP (TASE:RATI.L) fell 5.4% to NIS 0.38.
The Ministry of National Infrastructures has ordered Leviathan's operating partner Noble Energy Inc. (NYSE: NBL) to provide a detailed report of the breakdown, which will include a description of the findings and measures taken by the company to prevent future similar breakdowns. The ministry will seek the assistance of outside experts to check the issue.
The ministry also ordered Noble Energy to provide, as soon as possible, the Petroleum Supervisor with a detailed plan for abandoning the Leviathan 2 well, pursuant to the Petroleum Law and US standards. After the Petroleum Supervisor approves the plan, the company will abandon the well.
The Leviathan 2 well is due to verify the natural gas reserves found by the Leviathan 1 exploratory well. Drilling of the Leviathan 2 well began on March 15 and was suspended on May 8, at a depth of 4,548 meters.
Leviathan's partners said in response to the Ministry of National Infrastructures' order that the penetration of water into the borehole was insignificant, but that they decided nonetheless to move the Leviathan 2 well site, because they intend to use the borehole for gas production for many years, and there was concern that Leviathan 2's borehole was not suitable for this.
On May 14, Noble Energy notified the Ministry of National Infrastructures of the circumstances for abandoning the well. The company said that all technical requirements for cementing the borehole had been properly carried out by lowering protective pipes.
On May 26, Petroleum Supervisor Dr. Yaakov Mimran ordered Noble Energy to stop preparations for further drilling at Leviathan, and that new drilling would be subject to the results of the examination into the breakdown at the Leviathan 2 well, and after the Petroleum Supervisor received the detailed report.
Noble Energy owns 39.66% of Leviathan, Delek units Avner and Delek Drilling each own 22.67% and Ratio owns 15%.
Published by Globes [online], Israel business news - www.globes-online.com - on May 29, 2011
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