Page 13 - MEOG Week 43 2021

MEOG NEWS IN BRIEF MEOG

as well as a large pool of companies in Israel. offtake contracts and the take-or-pay Africa region, regional power pools and
The export volumes make up the majority of requirements under the GSPAs. The contracts electrification needs provide us opportunities
Leviathan’s gas sales and imply a reliance on also allow for additional sales in excess of in Morocco, Algeria, Tunisia and Egypt,” he
the offtakers in Jordan and Egypt to meet their contractual volumes if Leviathan has capacity added.
payment obligations. to meet gas demand. KHALEEJ TIMES
Leviathan holds a 15-year gas sales The gas sales prices are based on various
and purchase agreement (GSPA) with the pricing formulas, including linkages to the
Jordanian NEPCO, the national electricity electricity production tariff determined by the OIL
company of the Hashemite Kingdom of Public Utility Authority-Electricity for most
Jordan (BB-/Negative) and is wholly owned GSPAs in Israel and the Brent barrel price Syria’s false claim that US
by the Jordanian government. We view for the NEPCO and Blue Ocean GSPAs. This
Leviathan’s gas as strategically important exposes the project to price risk. However, this is stealing oil
to Jordan as the country does not have is limited by the provision of floor prices set in
any domestic sources of energy other than the individual contract. On October 13, the Syrian Minister of
renewables and is otherwise reliant on the FITCH RATINGS Economy and Trade, Mohammed Samer
import of relatively expensive LNG. al-Khalil, spoke at a news conference about
The Leviathan gas field also has a 15-year UAE is key market for L&T reconstruction and development in Syria after
GSPA in place with Blue Ocean for the export a decade of civil war.
of up to 4.7BCM per year to Egypt. Blue Larsen & Toubro (L&T) Ltd, an Indian Al-Khalil said losses in the Syrian oil sector
Ocean is a local marketing company that acts multinational conglomerate, which through 2020 reached $95 billion. He put
as the intermediary between Leviathan and has business interests in engineering, losses in the electricity sector at $100 billion.
the ultimate offtaker, the Egyptian Natural construction, manufacturing, technology and Oil and electricity were the two sectors most
Gas Holding Company (EGAS). The GSPA financial services, and is headquartered in targeted by destruction and looting during the
expressly allows for the export of Leviathan Mumbai, is expanding in the Middle East. fighting, he said.
gas as LNG in addition to domestic use. This SN Subrahmanyan, CEO and managing “Til today, oil fields continue to be
provides a strong incentive for Egypt to make director, L&T Limited, spoke exclusively to looted under U.S. supervision and by U.S.
full use of the contractual volumes even as it Khaleej Times. companies in northeastern Syria and with the
develops its domestic gas fields in the eastern He said L&T’s portfolio strategy targets cooperation of terrorist groups in the area,”
Mediterranean. well-balanced and geographically diversified al-Khalil said.
Furthermore, Delek Drilling, Chevron businesses across India and international That is false.
and East GAS jointly acquired a 39% stake markets. The Middle East has been one of To be sure, former President Donald
in the Eastern Mediterranean Gas Pipeline the key growth regions for the company, Trump’s repeated boasts that he “kept the oil”
(EMG), which also gives it the exclusive right which constitutes almost 61 per cent of in Syria have helped confuse matters. But his
to transport gas through the EMG from Israel the international order book of Rs 68,773 replacement, Joe Biden, killed a waiver that
to Egypt. This demonstrates Egypt’s intention (Dh33,642, 648.26) crore. had allowed a U.S. oil contractor to operate in
to maintain a long-term relationship with The Middle East accounted for 13 per Syria. The few U.S. troops there now are only
Leviathan. cent of our total order book composition to fight the remaining jihadists in the area.
We view the Israeli GSPAs as systemic in in financial year (FY) 21, the highest after The largest oil fields in Syria are in the
nature as gas supply in Israel is limited to the domestic order book. The region also east, close to the Iraqi borders and mostly in
Tamar and Leviathan gas fields currently and contributed 12 per cent to our total FY21 areas under the control of the Kurdish-led
the Karish/Tannin gas field from 2022. Gas revenue. “We are very optimistic about our autonomous authorities. Syria’s oil production
demand from the Israeli economy is forecast business plans in the Middle East region for averaged more than 400,000 barrels per day
to grow significantly in the medium term with the current year as well,” he said. between 2008 and 2010, but after the 2011
the gasification of the transport system and “The Middle East and North Africa (Mena) uprising began, the oil sector has been in a
replacement of coal-fired power plants. region has been one of the areas where we state of disarray, according to the U.S. Energy
The Leviathan gas field’s volume risk is have already got a foothold in countries Information Administration.
limited by the long-term nature of most such as Egypt and Algeria. In the North Syria is not a major oil producer compared

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