Israel has Saudi Arabia level oil reserves – 250 billion barrels of oil

The Israeli Shefela oil shale is on land. The natural gas is under the water

Harold Vinegar, the former chief scientists of Royal Dutch Shell, has devised an ambitious plan that would, if successful, turn Israel into one of the world’s leading oil producers. Now chief scientist for Israel Energy Initiatives (IEI), Vinegar maintains that the 238 sq km Shefela Basin holds the world’s second largest shale deposits outside the United States, from which around 250 billion barrels of oil – about the same as Saudi Arabia’s proven reserves, could be extractable. IEI estimates the marginal cost of production at between US$35 and US$40 per barrel. That, says Vinegar, would be cheaper than the US$60 or so per barrel it would cost to extract crude oil in more hospitable locations such as the Arctic, and even favourably with the US$30-US$40 in Brazilian deepwater.

Levantine Basin could have 122 trillion cubic feet of natural gas

IEI, owned by the American telecom giant IDT Corp, anticipates starting commercial production by 2020, producing 50,000 barrels a day initially. While that figure is a fraction of the 270,000 barrels per day Israel currently consumes, Vinegar maintains it is a further key step toward achieving energy independence. Vinegar proposes thermal recovery for Israeli shale oil.

The Tamar natural gas discovery will supply the Israeli domestic market for decades. Currently appraised at 8.4 trillion cubic feet (Tcf) Tamar is expected to deliver its first sales in 2013.

Lying to the north-west of Tamar, Leviathan holds around a further 16 Tcf, almost all of which could be slated purely for export. According to businessman Yitzhak Tshuva, part owner of Leviathan, its gas too will be ready for production by 2013, well ahead of schedule. But even at a combined total of 25 Tcf, Tamar and Leviathan only represent around a fifth of the 122 Tcf the US Geological Survey estimates lies in the Levantine Basin, much of which falls within Israeli jurisdiction.

There is plenty of political activity with this much oil and gas on the line. Egypt, Turkey, Lebanon and the Palestinians are all want to try to get a piece by arguing about the boundaries.

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