1. Dr. Michael Gardosh Director of G&G MEWR
Exploration and Production Update-
Australian Gas & Energy Trade Delegation To Israel
June 2013
Dr. Michael Gardosh
Director of G&G
MEWR
June 2013

2. Hydrocarbons are Exploited in Israel Since Biblical Time…..
Asphalt Block Near the Dead Sea Shore
Hydrocarbons are Exploited in Israel Since Biblical Time…..

3. Drilling History ( )
More than 500 oil and gas wells have been drilled, about 40 of them offshore.
First onshore oil discovery - Helez field in 1955.
Oil shows were discovered offshore in 1990th.
First offshore gas discovery - Noa field in 1999.
Two giant gas fields- Tamar and Leviathan, were discovered in

4. Oil and Gas Fields in Israel (2013)
9 gas fields were discovered
offshore
3 gas fields were developed
and producing (MariB, Noa,
Tamar)
1gas field is producing
onshore (Zohar)
5 oil fields were discovered
onshore, 2 are producing
(Helez, Meged)
Onshore production is minor
Oil Field
Gas Field
Leviathan
Tamar
Dalit
Noa
MariB
Aphrodite
Dolphin
Tanin
Shimshon
Meged
Helez
Zuk Tamrur
Ashdod
Emunah
Zohar

5. Exploration Activity in the Levantine Basin
Israel offshore EEZ covers ~45% of the offshore part of the Levant Basin Province (~ 25,000 km2)
There is an official maritime border agreement with Cyprus and unofficial one with Egypt and the Palestinian Authority
The Lebanease-Israeli border is under dispute, but Israel has not granted petroleum rights in the disputed area
Cyprus completed its second offshore bid round in 2012 and drilled 1 well (Aphrodite-1)
Lebanon completed a pre-qualification stage for its bidding
round in 2013
Israeli EEZ
A USGS assessment report from 2010
estimates the recoverable oil and gas resources in the Israeli portion of Levantine Basin Province at about TCF of gas and 1 BBO of oil
Source: USGS, 2010

6. Offshore exploration drilling after Noa gas discovery
18 exploration wells have been drilled following Noa gas discovery in 1999.
New major gas fields (Tamar, Leviathan, Aphrodite) are found at total depth of more than 5 km, at water depth that exceeds km, km from the shore.
Offshore exploration drilling success rate after the Noa discovery is 61 % (for sub-salt targets – 70%).
Sub-salt exploration well density is ~ 1 well per 2,000 sq.

7. Ongoing Exploration Activities
34 licenses and 4 leases are active offshore Israel.
Wells under drilling:
Karish-1 well, target - gas in Miocene-Oligocene sandstones. Prospective resources – 57 BCM. Operator – Noble Energy.
Yam-3 well, target – oil in Jurassic carbonate rocks. Contingent resources – 120 MMbbl. Operator - Caspian Drilling Company.
Two new exploration licenses, Royee and Neta, were granted in April Operator – Edison International.
More than 10 prospects are ready for drilling within the existing licenses.
Offshore areas which are not covered by active petroleum rights are closed for exploration and production by the Minister of Energy.

8. Exploration Targets in the Levantine Basin
Yam Yafo-1
Depth (km)
Plio-Pleistocene
Precambrian
Permian-M. Jurassic
M. Jurassic-M. Cretaceous
Senonian-Eocene
Oligocene-L. Miocene E W
M.-U. Miocene
Messinian (Evaporites)
Shallow gas in Pliocene turbidite sands (Yafo Play)
Messinian Salt
Sub-salt gas in Oligo-Miocene turbidite sands (Tamar Play)
Oil in Jurassic carbonates near
the shore (Yam Play)
Potential oil in Cretaceous and Jurassic rocks
In the center of the basin (Leviathan Deep Play)
Oil Play
Gas Play

9. Messinian Unconformity
The Yafo Gas Play A
The Yafo Fan Complex B
Plio-Pleistocene
Miocene
Yafo Sand Mbr.
5 km 1 2 3
Time (sec)
Messinian Unconformity
Noa Or
MariB
Nir
Fig. 14 A B
Flat Spot
1st regional profile
Close up seismic
Main Elements :
Type: Dry, Biogenic Gas
Source: Unknown, possibly Late Tertiary Marl+ saproples
Reservoir: L. Pliocene (Yafo Sand) m net pay , Porosity % , Perm. ~1-2d
Trap: Sand lobes + sand mound complexes Resrvoir Depth: m 9 9

10. The Tamar Gas Play Flat Spot Bat Sheva Seminar 2013 Tamar-4 Dalit-1
Messinian Evaporite
Near Top Tamar Sands A B B
Flat Spot A
Main Elements :
Type: Dry, mostly biogenic gas
Source: Unknown, possibly Late Tertiary organic-rich Marl + saproples
Reservoir: U. Oligocene-L. Miocen Tamar Sand (A,B,C,D), m net pay
Av. porosity 25%, Perm d
Trap: Syrian Arc Folds and uplifted blocks
Reservoir Depth: m
Bat Sheva Seminar 2013

11. The Tamar Gas Play- Shimshon Submarine Fan
The Tamar field
The Tamar Gas Play- Shimshon Submarine Fan
Messinian
M. U. Miocene
Oligocene- L. Miocene
Pliocene
10 km
Amplitude Extraction Map
Afiq Canyon 3D
Survey
AShdod Canyon 2D
line
Tamar Sands
Shimshon-1
Fig. 12

12. The Yam Oil Play B A A B Permian- L. Jurassic
Yam West-1 (Proj. 2km SW)
Yam-2 A B
5 km
TWT (ms)
Senonian -Eocene
Permian- L. Jurassic
M. Jurassic—M. Cretaceous
M.-U. Miocene
Precambrian
AC.
Gas Show
Oil Show
Hydrocarbon
Migration
Main Elements:
Type: Light oil ( API) and gas
Source: Unknown, Possibly Triassic-L. Jurassic
Reservoir: Mid Jurassic carbonate + L. Cretaceous siliciclastic gravity flows
Trap: Syrian Arc folds
Reservoir Depth: m
Bat Sheva Seminar 2013

13. The Leviathan Deep Oil Play
Leviatan-1
Messinian Salt
Middle-Upper Miocene
Oligocene-Lower Miocene
Upper Ceraceous
Magmatics ?
Jurassios- Ceraceous
Leviathan-1 was suspended at depth of 6,500m without reaching the potential, deep oil targets. A new well will be drilled in 2014
Tamar Gas
Oil ?

14. Israel Offshore Gas and Oil Reserves and Resources (April 2013)
Proved + Probable Gas Reserves (2P) (Tamar + other fields) – 285 Bcm
Contingent Gas Resources (2C) (Leviathan + Tanin+ other fields) – 533 Bcm
Prospective Gas Resources (undrilled prospects) – 440 Bcm
Contingent Oil Resources (2C) – 230 MMbbl
Prospective Oil Resources (Leviathan) – more than 1,000 MMbbl

15. Natural Gas Transmission System
Two operational gas routes into Israel, MariB-Noa and Tamar
Two natural gas onshore treatment terminals , Ashdod and Ashqelon
Onshore gas transmission system is almost entirely installed.
Single state-owned licensee (INGL) with a single mission in the energy sector.
Full open-access from day one and uniform regulated tariff (independent of distance)
Low pressure distribution network (up to 16 bar) operated by private companies.

16. Tamar gas field
Located 90 km offshore Israel at water depth of ~ 1,700 m.
Proved + probable reserves (2P) – 282 Bcm.
Longest subsea tieback in the world km.
Phase 1 of field development completed: 5 subsea production wells, capable of flowing 250 MMcf/d of gas each.
Commencement of production – March 30, 2013.
Current sales – 550 MMcf/d, expected to average 700 MMcf/d at 2013.
Phase 1 maximum gas production ~ 1bcf/d (up to ~1.5 bcf/d with compression and gas storage).
FEED assessment for FLNG is underway (subject to the government approval for gas export).

17. Tamar gas field pipelines''16 km of 2X150 Tamar platform Ashdod
Treatment plant
Mari B platform

18. Mari-B and Tamar Production Platforms
pipelines''16 km of 2X150
Tamar platform
30'' pipeline
Ashdod
Treatment plant
Mari B platform

19. Leviathan gas field
Located ~ 130 km offshore Israel at water depth of ~ 1,600 m.
Contingent resources (2C) – 485 Bcm.
Field development with FPSO.
Initial production to the domestic gas market in 2016.
Woodside has reached an agreement to acquire 30% interest in the Leviathan field and will be the operator for any LNG development of the field.
Leviathan field will be connected to the northern part of Israel. Two new natural gas treatment facilities are planned that will include offshore and onshore installations. Approvals are expected in 2014
Planning and surveying of the Leviathan pipeline route is underway

20. Leviathan gas field

21. Israel economy– fossil fuel mix

22. Natural Gas Supply in 2004-2013 (bcm)
(NGA)

23. Israel Natural Gas Demand, 2010-2040 (bcm)
(Natural Gas Authority Forecast)
26.6
23.1
20.6
16.7
13.3
BCM
Total:
9.7 19

24. 9

25. Government Policy
The Prime Minister and the Minister of Energy and Water Resources appointed an inter-ministerial Committee to examine the government's policy regarding natural gas in Israel. In August the Committee submitted final recommendations to the government.
Key principles of the government policy:
Ensuring Israel’s energy independence and security of supply;
Ensuring competition in the natural gas market;
Creating investment and business opportunities, ensuring stability for the players in the natural gas market.
Improving the regulatory system

26. Government Policy (cont.)
Supply of natural gas for the domestic market must be guaranteed for 25 years. Israel's total natural gas consumption for 25 years period is estimated at about 450 bcm.
Gas export will be allowed up to 500 bcm.
All gas fields on Israel's territory or in its EEZ will be connected to the national gas transmission network.
The government will be involved in planning and construction of gas transmission and treatment infrastructures.

27. Government policy (cont.)
Export licenses will be granted by the Minister of Energy and Water Resources for a period of 25 years.
Special measures will be undertaken to encourage the development of small and medium-sized gas fields.
The government policy is to encourage the entrance of major international oil and gas companies to Israel.
Government decision regarding the Committee recommendations is expected in June 2013

28. Gas Export Options
There is an absolute preference for export of Israeli natural gas from an export facility (onshore or offshore) located within the Israeli territory (including EEZ).
Export from facilities located outside Israel such as in Cyprus will be allowed only in the framework of bilateral agreements between the countries.
Preferable options for export are through an onshore LNG located on Israel’s Mediterranean coast, floating LNG and a pipeline (Jordan?).

29. Investment and Business Opportunities
Many offshore licensed areas have not been drilled yet and there are prospects that are ready for drilling in more than 10 licenses.
IOC’s such as Edison and Woodside are in the process of acquiring interest in the offshore area Leviathan field.
Acquiring rights in the existing licenses as an operator or non-operator is an effective way to join the exploration and production activities offshore Israel.
Recent discoveries and planned government involvement in gas infrastructure projects present significant opportunities for companies specializing in construction and operation of gas transmission and treatment facilities, LNG plants, etc.
The offshore areas is presently “closed”. It is expected to be open for new exploration and production through a tendering process in coming years.

30. Thank you for your visit In the land of Milk, Honey, Gas and Oil……