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Mediterranean Oil & Gas (LSE:MOG) and Noble Energy (NYSE:NE) have been making waves waves in the Mediterranean lately. It appears that the front-end investment period in some of their Mediterranean projects is over and the fun part is about to begin.
MOG is probably the smaller of the two stories. Nonetheless, it is poised to be a boon for investors as it is nearly ready to open its operational base in Malta in May 2013, which will precede its aggressive drilling program there scheduled for the last quarter of this year at the Hagar Qim #1 well. The company is also expecting a Competent Person’s Report, including an updated estimate of reserves and resources, to be completed in June.
MOG returned revenues of £2.6 million at an average realized price of £0.26 million per standard cubic meter, on production of 700 boepd. CEO Bill Briggs prepared investors for the future saying, “We have had a busy start to what is going to be an important year for MOG as we gear up for the drilling programme in Malta in Q4 2013 and as Ombrina Mare appraisal drilling draws nearer. We are financially strong and continue to build our cash position from production.” MOG share price was up 2.7% to 9.50 as of 8:00 am today.
Noble Energy, on the other hand, has already begun changing the Eastern Mediterranean with the commencement of LNG from the Tamar oil field off the coast of Israel earlier this month. The well is already generating 300 million cubit feet per day from a reserve of close to 10 trillion cubic feet. The Tamar project is a predecessor to the development of the Leviathan basin scheduled for production in 2017. That project, 80 miles off the coast of Haifa is estimated to hold 16 trillion cubic feet – enough to last 100 years. This is not only a game changer for Noble, but for the entire Middle Eastern economy.
With the Tamar project now online, Israel will no longer be dependent on other nations for its natural gas, but will, in fact, have more than enough for its own needs with plenty left over to eventually become a supplier to the world. This could twist the economic and political landscape of not only the Middle East, but of Europe as well. Russia, for instance, currently supplies nearly 25% of Europe’s natural gas needs. It is highly likely that some, if not many, European countries will turn to Israel. Even Russia itself, according to Forbes “is now cozying up to Israel, as it wants to distribute that potential natural gas to its partners.”
Once its oil deposits are tapped and operational – progress is already well underway – Israel, with an estimated 250 billion barrels, would become the third-largest petroleum product producer in the world, behind only Saudi Arabia and Venezuela.
The world, as we have known it, has been dependent primarily upon Arabian countries as its oil suppliers. With companies like Mediterranean Oil & Gas and Noble Energy beginning to access the resources of the Mediterranean Sea, we may see an the biggest geo-economic and ge0-political shifts since the end of World War II. Not to mention the investment opportunities that these companies afford. NE share price was down slightly this morning at 36.91 in early trading.
