Tamar gas fields creating international deals and Israeli millionaires

Tamar Gas Field Israel

Worldwide attention has been focusing recently on the Tamar and Leviathan natural gas rigs off the coast of Israel with new deals and exciting speculation every few weeks.

Less than a year after gas began flowing from the offshore rig, the companies and investors involved in the surveying and creation of Tamar are starting to profit. The management companies Avner and Delek Drilling earned $5.5 million in the first quarter of 2014, according to a report in the Israeli financial newspaper, The Marker.

As well as the big partners in the Tamar project, such as the Delek Group under the ownership of tycoon Yitzhak Tshuva, one of the big earners from Tamar is Eli Rosenberg, one of Israel’s top geologists. Rosenberg founded Avner in 1991, and has been involved in all of Israel’s major gas discoveries in the last decades. He recently sold a share of his royalty rights to Allied Holdings Ltd., managed by Itzhak Swary CPA, in a deal reportedly worth $40 million. Rosenberg also receives royalties as former consultant to JOEL Jerusalem Oil Exploration.

Another former geologist involved in the project, Joseph Langotsky, who named the field Tamar after his granddaughter, sued his partner Benny Steinmetz for giving up their rights to the field months before drilling began. The court ruled in his favor, and Steinmetz paid him $14 million in compensation last July.

The latest in the exciting deal and trades surrounding Tamar is a preliminary deal with Spanish energy company Union Fenosa SA, who are discussing plans to buy 20% of the output of Tamar, to provide liquid gas for its export terminal in Egypt. Union Fenosa already buys natural gas from a state-owned Egyptian company, and the new deal with Tamar, worth approximately $1.3 billion annually for the next 15 years, would provide electricity to more than 8 million customers in Spain. The Tamar partners are looking to sign a binding agreement within 6 months. The total value of the deal would be around $19.5 billion.

The various deals, and the new millionaires, have stirred up the debate over the state’s role in the field. For every unit of energy, worth 6 dollars, the State of Israel receives 70 cents, with $4.30 left as pure profit for the partners. This rate is one of the lowest in the world in comparable circumstances.