Yes, the Gas is Out There



By: YOSEF TASTASSA  
Published: November 30th 2010
in Economics » World

Illustration

Red November

 

Most of our reports during November were not that positive. We wrote about the inflation in China and how the Chinese markets slipped 10 per cent in less than four days.

 

The tension in the Korean peninsula did not do good for the world's markets. As we speak, the sporadic shooting continues along the border between North and South Korea.

 

Europe was at focus amid the Irish crisis and another "Roubini Prophecy" about the bad situation of Portugal and Spain. No one is sure that the Irish rescue package will work.

 

Ben Bernanke's "Quantitative Easing 2" is running as scheduled but it does not seem to be boosting the American economy. Some positive data were published about the labour market but they were not good enough for a significant change.

 

Uncertainty kept gold prices above $1,350 per oz and the commodities kept surging around the world; it was coffee, sugar, corn, wheat and all the basic things that make our lives much more expensive.

 

We started November by wondering whether it will be a red month. Now that it is the last day of the month we can say that November was indeed red and that there was not that much good news for investors.

 

Let us hope that the last month of 2010 will bring with it a small rally in the markets.

 

Green Leviathan

 

It was reported last weekend that Noble Energy CEO, Mr. Charles Davidson, is expected to visit Israel early this week. The purpose of this visit is to discuss routine business issues with Israeli seniors.

 

As we wrote before in Shalom Life, Noble Energy owns nearly 40 per cent of Leviathan, whose maximum value is $20 billion.

 

The drilling rig reached its target layer two days ago. The report was as follows: "It is apparent that natural gas has been encountered in this interval". It is still an initial report, there are still more drillings and tests in the coming two weeks but the sentiment is positive.

 

Energy sector surge

 

The energy sector in Tel Aviv was at focus. The Leviathan partners surged and the media has already started analyzing the sector's prices and the enormous potential in other sites in the Mediterranean Sea yet to be mapped and explored.

 

Ratio surged by 4.3 per cent, Avner surged by 5.07 per cent and Delek Energy added to its value "just" 2.86 per cent.

 

What's next?

 

The energy sector will probably be in focus during December. Accurate reports will be published from Leviathan as the drillings will go deeper. The taxing and benefits issue will be a burden on the sector, and the Israeli government will have to decide quickly about the issue in order to bring certainty to the investors.

 

Besides the Tamar and Leviathan reservoirs, there are many sites out there waiting to be explored. Many companies are now raising funds from Israeli citizens through the stock markets in order to start future explorations. In ten years from now we may realize that the eastern Mediterranean bottom is full of natural treasures and that Israel will supply natural gas to Europe.



Related articles: (natural gas, Leviathan, Tamar, energy)




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