Leviathan partners shrug off Israel’s downgrade of giant gas field’s size

By Ari Rabinovitch

JERUSALEM (Reuters) – The partners in Israel’s Leviathan natural gas field on Sunday shrugged off a lower estimate of its size from the country’s Energy Ministry, which said the field could be 20 percent smaller than the companies have predicted.

The ministry included the estimate in its approval on Thursday of the development plan for the field. This was 17.6 trillion cubic feet (tcf), lower than the companies’ 21.9 tcf estimate.

The ministry also said this could change after it receives more drilling data on one of the project’s wells, Leviathan 5.

The companies are sticking with their assessment and are pushing ahead with plans to bring the field online by the end of 2019.

“The partnership clarifies that there has been no change in the resource estimate,” the Israeli partners said in a statement to the Tel Aviv Stock Exchange.

Found in 2010, Leviathan was one of the world’s largest offshore discoveries of the decade, expected to bring Israel a major cash windfall and export deals which are waiting to be signed with countries like Egypt, Jordan and possibly Turkey.

Israeli conglomerate Delek Group, through subsidiaries Delek Drilling and Avner Oil, holds a 45.34 percent stake in Leviathan. Texas-based Noble Energy has a 39.66 percent share, and Israel’s Ratio Oil has the remaining 15 percent.

The issue has had little impact on the companies’ shares in Tel Aviv, which were mostly flat in Tel Aviv on Sunday.

Yossi Abu, chief executive of Delek Drilling and Avner Oil, told Reuters they were satisfied with the Energy Ministry’s approval, which he said included a production capacity of 21 billion cubic meters a year.

“The reserves are enough to meet domestic demand and exporting contracts with neighboring countries as we plan, according to the approved development plan,” he said.

Both the companies and the ministry used outside energy consultants to come up with their estimates. (Editing by Jane Merriman)