Fischer Urges Israel to Reconsider How New Gas Reserves Are Used

Israel should take its geopolitical situation into account when deciding how much of its newly flowing gas to export, said Bank of Israel Governor Stanley Fischer, who didn’t elaborate on how the sales should be allocated.

Fischer said the amount of gas thought to be contained in reserves off Israel’s Mediterranean coast had been reduced from original estimates.

“We are in a special geopolitical situation,” the central bank governor said at a Jerusalem press conference today. “We need to preserve our ability to supply energy needs in the cheapest and most efficient manner. It would be worthwhile rechecking this question.”

Gas started flowing from the offshore Tamar field on March 30. The field, in the eastern Mediterranean Sea, is being developed by a group that includes Noble Energy Inc., Delek Drilling-LP, Avner Oil Exploration LLP and Isramco Negev 2 LP.

The government should be “conservative” regarding estimates of gas in the reserves, Nathan Sussman, head of research at the central bank said at the press conference. Since the publication of the report by the Tzemach committee, which examined the question of gas exports, the Myra and Sara wells were found to be dry holes and the Ishai well was found to contain little gas, he said.

The committee, headed by Shaul Tzemach, recommended in August 2012 that Israel should allow as much as 500 billion cubic meters (18 trillion cubic feet) of natural gas to be exported. The committee said that would allow for sufficient gas for domestic use for 25 years.

Before it's here, it's on the Bloomberg Terminal.