New Market Research Report: Israel Oil & Gas Report Q2 2016

Efforts to block the natural gas framework in the High Court continue drag out its implementation and mar investor confidence in the Israeli oil and gas sector. Exports of gas are expected to begin from H216.

We highlight the following trends and developments in Israel's oil and gas sector:

Prime Minister Benjamin Netenyahu approved the gas framework on December 17 2015.

Four successful petitions were filed with the High Court of Justice, in particular opposing the 'stability clause' which freezes regulatory and price changes for 10-15 years.

The Court suggested an independent legal solution should be sought for the stability clause, a deal unlikely to pass in Knesset. Uncertainty remains.

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The framework would trigger the following restructuring of the Israeli offshore:

Delek Group is to sell its entire 31% stake in the Tamar field within six years.

Noble Energy is to reduce its stake in the Tamar field within six years from 36% to 25%, but will remain operator.

Both Noble and Delek will be required to sell their entire holdings in the Karish and Tanin fields within 14 months.

Export quotas from the divestment of these fields will be transferred to the Leviathan field, but only once the Tanin and Karish fields are connected to the mainland.

The gas framework will allow for new exploration once passed, with Minister Yuval Steinitz expecting to offer new exploration licenses.

The gas framework will progress work on the Tamar expansion project, which we forecast to increase production from mid-2018, and support progress on the Leviathan field.

We have revised down our gas forecast given the revised development plan for the first phase of the Leviathan project. We now calculate phase 1 will produce up to 12bcm from 2020, phase 2 is not yet forecast, but would add a further 9bcm.

Low oil prices have supported strong refining margins at Israel's two refineries over 2015 and increased refined products production.

The Israel Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Israel including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's Israel Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Israeli oil and gas industry.

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