Production of natural gas at the Tamar offshore field in Israel has resumed, local media is reporting, a month after it was suspended in the wake of the Hamas attacks on southern Israel.
The Israeli government ordered production to be shut down at the field due to its proximity to the battlefield. As a result, both local supply and exports to Egypt suffered a slump. As a result of this, hopes for diversification of LNG supplies for Europe dimmed—Egypt was viewed as an important new source of LNG.
The Tamar field is one of the two massive offshore gas fields that put Israel on the global gas map when they were discovered. The field last year produced 10.25 billion cu m, up by 18% in 2021. It is operated by Chevron, which also operates the other major gas field in the country, Leviathan.
The Tamar and Leviathan fields were the foundation for Israel’s further ambitions in the field of gas. Last month, authorities in Tel Aviv awarded 12 exploration licenses to companies including BP and Eni to advance those ambitions.
“The winning companies have committed to unprecedented investments in natural gas exploration over the coming three years, in the hope of discovering new natural gas reserves,” Energy Minister Israel Katz said, as quoted by the Times of Israel.
Any new discoveries would “strengthen Israel’s energy security, and international ties, lower the cost of living, and provide energy support to accelerate the transition of the economy to renewable energies,” Katz also said.
Rystad Energy meanwhile warned that the conflict risks disrupt the regional gas market and by extension affect the gas market in Europe, too.
“The ongoing conflict is likely to have a limited upward impact on near-term gas prices that will reflect a geopolitical risk premium already manifested in oil prices,” the vice president of Rystad’s Middle East Upstream Research department said in late October.
“However, there remains a risk of escalation into a broader conflict that could cause a short-term increase in energy prices. If high energy prices lead to inflation and further interest rate tightening, they may eventually correct down in the months ahead if the economic outlook worsens on this account,” Aditya Saraswat also said.
By Irina Slav for Oilprice.com
