Noble Energy Inc. or NBL will dig 6,500 meters or 4 miles below the Mediterranean seabed to extract oil later this year. The company is aiming to produce more than 1.5 billion barrels of crude oil which will be used to meet the country’s oil demand. The news has been celebrated in the country which has though become self-sufficient in natural gas production still imports 98 per cent of its oil.
Israel pays more than $10 billion a year for its oil imports; however, with the latest discovery it will be able to increase tax revenue and boost the country’s balance of payments as well as reduce vulnerability to supply disruptions which it always faces thanks to its geographical location.
Noble Energy, Inc., a leading independent energy company that has a diverse portfolio of high-quality assets, is not the only explorer hunting for oil in Israel but some other companies such as Shemen Oil & Gas (SMOG) Resources Ltd. are also discovering/have discovered oil in the country. For instance, Shemen Oil & Gas is looking for an oil field which experts claim may have more than 120 million barrels.
The Oil Production to Strengthen Economy and Defense
Apart from the economy, the new oil reserves and their exploitation for oil production will also help the country strengthen its defense as with it their dependency on the Middle-East oil producing countries will be reduced drastically. Moreover, when Israel becomes energy independent, it will have more money to invest on other segments including of defense R&D.
Whereas the oil reserve has boosted Israel’s confidence, Noble Energy, Inc. feels confident that the discoveries will help it expand it more. Earlier the company disclosed that its exploration program has delivered a significant lineup of major development projects in the last couple of years and finding the huge oil reserve ‘Leviathan’ in Israel is the largest discovery in Noble Energy’s history at 18 trillion cubic feet of gross natural gas.
Deep Drilling Made Possible by the Latest Technology
However, it is the technology that has played vital role in to finding Israel’s offshore energy deposits. Though there have been deep drilling in the U.S. Gulf of Mexico and Brazil, it will be the first time that the Leviathan oil well will be drilled in 1,600 meters of water and consequently probe a further 6,500 through the rocks below.
Expensive yet Worthwhile
The company sources say that as it is a deep drilling it will probably cost more than the $120 million which was set originally. However, the cost is justified as there are greater profits from pumping oil over gas.