The partners in the Leviathan gas field - Noble Energy Inc. (NYSE: NBL), Delek Group Ltd. (TASE: DLEKG), and Ratio Oil Exploration (1992) LP (TASE:RATI.L) - are considering leasing a rig to replace the planned drillship, if they decided to go ahead with the drilling a well to the oil-bearing strata. The rig with the best chances of being leased is owned by Italy's Saipem SpA (BIT: SPM).
A Saipem rig is due to arrive in Cypriot waters to drill an exploratory well for ENI SpA (NYSE: E; BIT: ENI) over a four-month period. The characteristics of the well are very similar to those of the well planned for Leviathan, and it would be possible to use geologic data obtained from the first Leviathan well. It is important to emphasize that leasing the rig is subject to a final decision to drill an oil well at all - a decision that still depends on other conditions unrelated to the availability of a rig, the most important of which is regulatory certainty.
The Leviathan oil well was supposed to be drilled in the first quarter of 2014 by the new Atwood Advantage drillship, which Noble Energy leased for three years. However, in response the uncertainty created by the government over the timetable for the Leviathan gas field, Noble Energy has redirected the drillship to its leases in the Gulf of Mexico.
Noble Energy CEO Charles Davidson said that there was no point in sending the drillship to Israel just to drill a well if there was no certainty if additional wells could be drilled. The cost of bringing the drillship to Israel is $50-75 million.
However, energy exploration industry sources say that there is a strong probability that Noble Energy and Delek may decide in the end to drill several wells at Leviathan to the oil bearing strata and for natural gas production. The Cypriot media reports that Noble Energy has not ruled out drilling more exploratory wells in Block 12, following analysis of the 3D seismic survey carried out in Israel's nearby Ruth licenses, where possible gas-bearing structures were found.
Published by Globes [online], Israel business news - www.globes-online.com - on December 11, 2013
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