Tagged: Natural Gas

The Economist | Israel’s and Palestine’s oil and gas: Too optimistic?

ARE governments of the Levant fooling their people with false promises of an offshore gas bonanza? From the proceeds, Lebanon hopes to fund a bullet train that will end Beirut’s traffic snarl-ups. Across the water, the Cypriot government has equally grandiose plans. By 2020 a vast new complex in Vasilikos, on Cyprus’s southern coast, is supposed to start shipping liquefied natural gas (LNG) to Europe and even Asia, salvaging the country’s finances. Gas reserves, say Cypriot optimists, amount to 96 trillion cubic feet.

Yet most oil analysts say this is all wildly over the top. Even Israel, whose development of offshore gas is most advanced, is unlikely, they reckon, to start exporting large amounts by 2020, as it hopes.

The sceptics say that the main brake is a lack of regional co-operation rather than a shortage of oil and gas. The Americans’ official Geological Survey estimates that from Gaza’s coast to southern Turkey the eastern Mediterranean holds 122 trillion cubic feet of gas, comparable to the reserves of Iraq. But Lebanon’s caretaker government lacks the authority to pass the legislation needed to persuade foreign oil companies to start drilling; a heralded auction is again likely to be delayed. America’s effort to mediate over a disputed maritime boundary between Lebanon and Israel is stalling progress. The civil war in Syria is scaring away big oil companies. And drilling off the Lebanese coast has yet to begin. (…)

Read the rest of the piece here.

The Economist | Algeria’s oil and gas: Not so jolly

Recent events and wariness of foreign investors dent the oil-and-gas economy

TIGHT military control and generous spending on social services, thanks to the high price of oil and gas that Algeria has in abundance, have so far prevented President Abdelaziz Bouteflika and his regime from being shaken by the upheavals in other Arab countries. In 2011 oil exports earned Algeria $55 billion. Foreign-currency reserves are strong. GDP is expected to rise by more than 3% this year, says the IMF. The official unemployment rate of around 10% is lower than elsewhere in the region.

But all is not well. Of the world’s big oil-producing regions only the North Sea’s output has dipped more steeply in the past five years. And many of Algeria’s usual markets are shrinking. North America, where refineries once paid a premium for Algeria’s high-quality crude, takes the largest dollop of the country’s 1.2m barrels a day. Now they are tapping cheaper supplies from North Dakota. Moreover, Algeria has become too reliant on high prices. To break even, its budget banks on oil at around $120 a barrel, above typical forecasts for this year; today’s price is around $116 for Brent. (…)

Read the rest of the piece here.

NB, I was not in Algiers, despite the dateline above. This was an editing error.