A U.S.-Israeli group drilling in the eastern Mediterranean has discovered positive signs of another natural gas field off Israel's coast, potentially boosting the country's reserves as it drafts its export policy.
Texas-based Noble Energy and its Israeli partners, Avner Oil Exploration and Delek Drilling, said on Thursday they found "significant signs" of gas at an exploratory well at the Karish prospect, about 75 km (46 miles) from the coastal port of Haifa.
Karish could hold 2 trillion cubic feet (tcf) of gas, Delek Drilling said, citing a preliminary estimate, making it much smaller than the two massive Tamar and Leviathan fields recently discovered in Israeli waters.
But it is still a commercial quantity and, if proven, strengthens the case for energy companies who are lobbying the government to allow large levels of exports.
The Karish partners will publish a more detailed analysis of the data in about two months, Delek Drilling said.
Tamar, which came online in March with an estimated 10 tcf, can meet Israel's needs for decades. Leviathan, expected to begin production in 2016, is estimated to hold 19 tcf.
Israel, long reliant on energy imports, is struggling to find the balance of how much gas to keep and how much to export.
Exploration companies argue that because Israel is such a small market, further investment in the area could only be justified if there is a substantial export quota. But if too much is sold abroad, the country may lose out on long-term energy independence.
Noble, which is also leading the Leviathan project, has said it cannot commit to further development until the government decides on its policy. That includes finalising a deal to bring Australia's Woodside Petroleum in on Leviathan to help with liquefied natural gas exports.
Energy Minister Silvan Shalom has said a decision will be made in the coming weeks.
The verdict will likely be based on recommendations made by a government committee last year. The panel called on Israel to keep enough gas to satisfy its own needs for 25 years, which comes out to a bit less than half of Israel's total reserves, currently estimated at 33.5 tcf.
In the meantime, a number of lawmakers and environmental groups have called to lower the recommended export cap, or even to put off making any final judgement for years.
The gas windfall will give a bump to Israel's economy, which is expected to grow 2.8 percent in 2013 excluding gas production, down from 3.2 percent in 2012. With gas, the 2013 forecast jumps to 3.8 percent.
"The natural gas industry is a key economic growth engine," said Delek Drilling CEO Yossi Abu following the Karish announcement. "Exports in significant quantities will encourage additional players from Israel and the world to invest vast sums of money in further exploration."