Noble Energy: Falling Gas Prices will not be good for Israel Hydrocarbons Development

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Noble Energy Israel country manager Binyamin Zomer: Everyone loses if prices fall.

Israel country manager Binyamin Zomer from Noble Energy, was interviewed today on Israeli TV 10 about the latest developments in the natural gas industry and the delays in developing the Leviathan gas reservoir.Zomer said, “Today, we are settling for one pipeline. The country has several targets, such as developing infrastructure and having several reservoirs, not just one  (Tamar).”

Question: You want to make a profit, and we want the country to develop. Where can we meet?

Zomer: “The interests are the same. We have invested more than $1 billion in Leviathan, and we want to make progress. How can we make progress when I don’t know whether or not it’s even mine? When I go to the banks and ask for a loan, the bank first of all wants to know that it’s mine.”

Was the contract changed after it was signed with Israel Electric Corporation (IEC)?

“There was no contract with IEC; there were negotiations that were suspended. After the negotiations were renewed, what happened was that global prices rose. There’s a lot of disinformation , so you have to concentrate on the facts.”

Did you ask for the contract to be changed so that you wouldn’t have to employ Israelis?

“75% of our employees are Israelis. We spoke in the ownership deed about terms that would be suitable for the current market in Israel. We have an interest in employing as many Israelis as possible. We’re investing a lot of money in order to employ Israelis. What’s restricting it now is that the projects aren’t going forward. If we do it, there will be thousands of Israelis working in the sector.”

How much profit will you make if the price drops from $5 plus per mmbtu to $3 plus per mmbtu?

It will cause the country a lot of damage if that happens. Everyone will lose. Investors won’t come, and we won’t be able to justify the expenditure with such low prices. We won’t make a profit. They said prices should be lower in Egypt, too, and now they have to import gas. This is a very big reservoir but we have to invest $6-8 billion here. Meanwhile, we can’t invest in further development, because the regulation is unstable.”

Source:  Israeli Media