Leviathan oil well drilling postponed indefinitely
Sources inform ''Globes'' that investment in developing Leviathan's gas and oil field has ground almost to a complete halt. 18 November 13 16:57, Amiram Barkat
Drilling of the well to Leviathan's oil-bearing strata, which was supposed to begin in December, has been postponed indefinitely. The $250 million well will reportedly be delayed by at least six months. Sources at Leviathan's partners - Noble Energy Inc. (NYSE: NBL), Delek Group Ltd. (TASE: DLEKG), and Ratio Oil Exploration (1992) LP (TASE:RATI.L) - told "Globes" that no decision had been taken to postpone the drilling, but other sources informed ''Globes'' that investment in developing Leviathan's gas field has ground almost to a complete halt. These include the tender for choosing a floating production, storage and offloading (FPSO) ship. In addition, expensive equipment intended for developing the gas field has been sent out of Israel. "Israel's oil and gas exploration industry has ceased to exist," a major drilling equipment supplier told "Globes". Postponing Leviathan's development could have major repercussions on Israel's economy, which will face a natural gas shortage from 2015. At a recent electrical engineers conference Noble Energy VP Eastern Mediterranean Lawson Freeman said that regulatory uncertainty was the main reason delaying Leviathan's development, such as the lack of an approved outline plan for bringing gas from Leviathan, without which Noble Energy cannot obtain rights to develop the field. Leviathan's partners are waiting for Antitrust Authority director general David Gilo's decision on a suspected cartel in the licenses. The companies have invested over $800 million in Leviathan to date, mostly for drilling and planning the field's development. Postponing Leviathan's oil well is the latest development in the saga. The Atwood Advantage ultra deepwater drillship, which was scheduled to arrive in Israeli waters in October to drill the well, is still at the Daewoo shipyard in South Korea. The ship was built to order for Noble Energy, after the rig that tried to reach the oil-bearing strata was forced to stop drilling at a depth of 6,500 meters because of high pressure disparities at the great depth. Updated estimates give a 25% probability of finding 1.5 billion barrels of oil in various target strata beneath Leviathan's gas-bearing strata. Construction of the Atwood Advantage was completed in September. Noble Energy has committed to hiring the ship at a cost of $584,000 a day, and planned to first use the ship at Leviathan before moving it other deepwater fields offshore from West Africa and the Falklands. Noble Energy declined to comment on the report.