London — Israel's advisory Petroleum Council has recommended that the country's energy ministry approve US major Chevron's $5 billion takeover of Noble Energy, operator of Israel's Leviathan and Tamar offshore gas fields.
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In a statement Sept. 14, Israeli energy minister Yuval Steinitz said Chevron's entry into the country's gas industry was a "huge expression of confidence" in Israel's energy sector.
Chevron and Noble announced the deal in July, and if completed it will see Chevron take over as operator of the two giant Israeli gas fields.
"The Petroleum Council's recommendation to approve the entry of Chevron into Israel will make the possibilities of the Israeli energy industry unlimited," Steinitz said.
Gas production from the giant Leviathan field -- which holds 22 Tcf (620 Bcm) of recoverable gas reserves -- began at the end of December last year.
It was discovered in 2010 but development was slow due to difficulty in monetizing the resource.
It was finally agreed in February 2018 for Leviathan gas to be exported to Egypt under a long-term contract with local Egyptian supplier Dolphinus Holdings.
Leviathan is the second major gas field in Israel to begin production following the start-up of the Noble-operated Tamar field in 2013, which continues to serve the Israeli domestic market.
Tamar will also be used to supply Egypt under the Dolphinus deal.
Steinitz said Chevron's entry was another step in turning Israel into an "energy power."
The ministry said it was the first time that one of the world's energy majors had decided to integrate into operations in Israel.
Chevron's entry had the "huge" potential for promoting the continued development of the Leviathan field as well as for the development of export projects and the continuation of gas exploration in Israel, it said.
"The approval of the deal will greatly assist the Israeli energy economy," it said.
At the time of the deal, Chevron said the acquisition provided it with "low-cost, proved reserves and attractive undeveloped resources that will enhance an already advantaged upstream portfolio."
"Noble brings low-capital, cash-generating offshore assets in Israel, strengthening Chevron's position in the Eastern Mediterranean," it said.
In the East Mediterranean, Noble produces a net 311 MMcf/d (9 million cu m/d) of gas equivalent, according to a September investor presentation.