Israel's proved reserves of oil at 11.5 million barrels and its proved reserves of natural gas at 10.1 trillion cubic feet (Tcf). While neither figure places Israel in the top-40 globally, these totals are significantly higher than they were a few years ago.

Energy exploration over the past several years uncovered significant natural gas resources in Israel, primarily in the country's offshore areas. The Mari-B field—discovered in 2000—provided the first significant volumes of domestically-produced natural gas to Israel's markets, but in 2012 production plummeted as the field entered the final stages of depletion. In prior years, the Mari-B field met up to 40% of Israel's natural gas demand.

Israel began commercial production of natural gas from the Tamar field (located offshore, near Haifa) in 2013. The natural gas produced from the Tamar field travels through existing onshore facilities at Ashdod via a pipeline that links to existing infrastructure at the Mari-B development site. Plans are moving forward on a floating LNG project that will draw natural gas supply from the Tamar field (with estimated discoveries of 10 Tcf) and the nearby Dalit field and will produce approximately 3 million tons of LNG per year (144 billion cubic feet per year) as soon as 2017. The most recent offshore discovery occurred at the Tamar Southwest exploration well, located 8 miles southwest of the Tamar Field, and the Tamar Southwest field may contain more than 500 billion cubic feet of natural gas in place.

The most significant find in offshore Israel is the Leviathan field, located approximately 80 miles off the coast and situated in water that is more than 5,000 feet deep. Assessments of the Leviathan field indicate that there could be as much as 19 Tcf of recoverable natural gas in place. Production could begin at Leviathan in 2016 at the earliest.

While historically Israel has been an importer of natural gas—most recently through the Arish-Ashkelon pipeline from Egypt and a very small portion through a newly installed floating and regasification terminal— the discoveries of the Tamar and Leviathan fields (among several others) should allow the country to become a significant exporter of natural gas in the next decade. There are competing proposals to develop pipelines and LNG infrastructure to support natural gas exports, but deliberations about how Israel will get its natural gas to market are ongoing.

In 2012, Israel consumed 15.4 million short tons of coal, mostly for use in electricity generation. That figure is likely to decline as Israel's natural gas sector continues its rapid growth and natural gas-fired generating capacity supplants coal-fired generating capacity.

While not currently a significant oil producer, Israel is the eastern Mediterranean's largest consumer of petroleum. Total Israeli oil consumption averaged 246,000 bbl/d from 2000-2011, ranging from a low of 233,000 bbl/d in 2005 to a high of 263,000 bbl/d in 2011. In addition, Israel was the region's second-largest natural gas consumer in 2011, the last year for which EIA data are available. Unlike Israel's petroleum consumption, which Israel meets with imports. Much of the natural gas consumed in Israel over the last decade came from domestic sources. Israel wants to increase the utilization of natural gas across all end-use sectors. However, even with increased demand Israel should have more than enough domestically-produced natural gas to meet its growing needs, and the country could begin exporting volumes as soon as 2017.

The Mari-B field—discovered in 2000—provided the first significant volumes of domestically-produced natural gas to Israel's markets, but in 2012 production plummeted as the field entered the final stages of depletion. In prior years, the Mari-B field met up to 40 percent of Israel's natural gas demand. Israel's total production volumes in 2012 reached more than 150 Bcf, after being as low as 350 million cubic feet (MMcf) as recently as 2002. Natural gas consumption in Israel also grew in recent years, from an annual average of 350 MMcf between 2000 and 2002 to a peak of 129 Bcf in 2010.

With additional production volumes coming online from the Tamar field in early 2013, the domestic market should continue to shift away from other energy sources in favor of natural gas. Existing infrastructure at the Mari-B development site moves the natural gas produced from the Tamar field to onshore facilities at the Ashdod terminal, with initial volumes of 500 MMcf/d and peak flow rates of up to 1 billion cubic feet per day (Bcf/d) in the near future. Natural gas for Israeli domestic use from the Leviathan field could be ready as soon as 2016, and it should begin with productive volumes of up to 750 MMcf/d.

Israel exports small quantities of refined products, but with domestic production being virtually nonexistent, imported oil meets nearly 99 percent of total oil demand, and over 80 percent of those imports are crude oil. Israeli exports of refined products grew from approximately 66,000 bbl/d in 2000 to 84,000 bbl/d in 2010, with residual and distillate fuel oil accounting for approximately half of exports over that period.

Largely as a result of poor regional relations, Israel does not share any international oil pipelines with its neighbours. In 2012, the majority of Israel's crude oil imports came from Russia and Azerbaijan via tanker vessels. Israel plans to reduce its dependence on oil imports through an expansion of its rapidly-growing natural gas sector.

A significant portion of Israel's natural gas over the past several years came from neighbouring Egypt, but Egypt suspended supply in the aftermath of unrest beginning in 2011. The el-Arish-Ashlekon pipeline (Egypt-Israel) met up to 40 percent of Israel's demand prior to its closure, but with additional volumes from Israel's offshore fields becoming available in early 2013, the country no longer requires Egyptian supply.

In early 2013, Israel began receiving LNG cargoes on a short-term contract (two loads per month) in order to bridge the gap created by the loss of Egyptian volumes, the swift decline in production of the Mari-B field, and the start-up of the Tamar field in April 2013. The contract could deliver between 50 and 70 Bcf per year to Israel, but delivered volumes hinge on how quickly operators can bring the Tamar field up to peak capacity.

The Israeli government approved plans to supply the Palestinian Authority with natural gas from Leviathan once production commences. In early 2014, Noble Energy signed a natural gas sales agreement with two Jordanian companies to supply them with natural gas from the Tamar field. The initial term of the agreement with Jordan is 15 years, for a total gross quantity of 66 billion cubic feet, with exports beginning in 2016.

It was announced in early May 2016 that the Hatrurim oil and gas exploration license in the Dead Sea had uncovered an oil reservoir containing 7-11 million barrels of oil. The Hatrurim license area covers 94 square kilometers in the Dead Sea region, and the initial exploratory drilling was carried out in 1995.

The Israeli government approved the development of the Leviathan natural gas field on June 2, 2016. The field is expected to be operational by 2019, and contains an estimated 622 cubic meters of natural gas reserves.

Service Providers Opportunities

 A variety of long term and short term opportunities exist in the Israeli market. Local players are interested in business cooperation on the basis of strategic partnerships, project finance and supply chains. Opportunities exist for foreign companies willing to assist in exploration efforts in Israel not just as service providers or subcontractors, but as strategic partners as well. 

 There is an understanding in the market that without strategic foreign partners who can also bring major financial/funding capabilities into the market, production levels will remain limited.  Since this a relatively new industry for Israel, local technical expertise is currently limited and this will create business opportunities in a variety of sectors such as: 

Chemical & Industrial Gas Processing Equipment 

  • Chemicals & Industrial Gases (Excl. Petroleum Based Products)
  • Civil Engineering and Works
  • Consultancy Work
  • Corrosion Control Systems and Equipment
  • Design Services
  • Drilling & Blasting
  • Environmental Engineering
  • Exploration Technologies
  • Filtration & Treatment - Gas & Liquid
  • Financing
  • Fire Protection
  • Fuel Processing & Power Generation Equipment
  • Marine Engineering (including offshore structures)
  • Mechanical Engineering
  • Metal Treatment & Coatings
  • Mining & Minerals Processing Equipment
  • Personnel & Training Providers
  • Pipe work, Hoses & Pipeline Equipment
  • Process Engineering (industrial)
  • Pumps & Valves
  • Refractory Products
  • Research Organizations & Associations
  • Safety & Security and Equipment