Tuesday, January 8, 2013
Israel Oil Technological Developments
Israel Oil Technological Developments
The oil shale industry dates back to late 17th century Scotland. Oil shale pyrolysis was developed in France, where in 1832, a method for producing lighting oil was developed. During the 19th century oil shale thermal processing factories also operated in Australia, the United States, Brazil, Germany, and Scotland. During the 20th century oil shale processing factories were built in several additional countries, including China and Israel. However, later most of these were closed, largely due to the rapid development of the crude oil industry.
Commercial production of shale oil using the In-Situ technology started in Sweden in the mid 1940's. Low oil prices caused the production of oil from oil shale to no longer be economically viable.
During the energy crisis in the 1970's, the global interest in the oil shale as an alternative fuel increased, but the technology wasn't sufficient for the production to be economically viable. In addition, the environmental impact was relatively high. Since then, key development has been made in the oil industry and other related fields. Today, using new technologies, it is economically viable to produce oil from oil shale and, it can be done with low environmental impact.
The use of electric heaters to heat oil shale is not a new concept. At the beginning of World War II the Swedish government urgently ramped up its oil shale development in response to a blockade of imported oil. Four shale oil recovery processes were developed simultaneously near Kvarntorp, Sweden (100 miles of Stockholm) of which one was an in-situ process (invented by Dr. Fredrik Ljungström in 1940). Ljungström's method utilizes a hexagonal pattern of 6 heater wells surrounding a production well in the center.
Relatively light products were produced and overall the technology was a success with ratio of 3.1:1 energy out to energy in. After the war, cheaper supplies of imported oil became available again and the cost of labor and electricity increased. These factors eventually led to the closing of the In-Situ project in 1960.
Several major oil companies have been involved in developing oil shale technology for more than 50 years. A combination of laboratory and field testing has brought clearly into focus both the challenges and opportunities for a commercial oil shale projects. The American major oil company Shell has conducted eight Colorado field pilots in the oil shale resource with increasing scope, cost, and complexity. The majority of effort since the 1990s has been devoted to actively studying important elements of the In-Situ Conversion Process (ICP).
In the last decade, several major oil & gas companies obtained Research, Development, and Demonstration (RDD) leases under the terms of the Energy Policy Act of 2005 for oil shale In-Situ projects.
Today, more than half a million barrels are produced daily from tar sands in the province Alberta, Canada, using the In-Situ SAG-D process.
The In-Situ Conversion Process (ICP) is the acceleration of natural maturation of kerogen "in place" (i.e. without mining).
ICP involves drilling heating wells into the oil shale with a smaller number of production wells strategically placed in the heating pattern. The heater wells gradually heat subsurface oil shale formation. The elevated temperature converts the kerogen into lighter hydrocarbons fractions, which are then brought to the surface through the production wells as light hydrocarbon fuel, leaving the coke residue in the reservoir.
The main features of ICP are:
•Thermal cracking – The complex, long chained kerogen molecule decomposes natural gas & light fuels.
•In-situ hydrogenation – The simultaneous generation of hydrogen refines the fuel in place, increasing their H:C ratio and yielding high quality products.
•High recovery efficiency due to uniform heat conduction and vapor phase production
•The heating method in ICP can be from in a variety of sources such as electrical resistance or closed-loop circulation of a hot fluid.
Israel an Energy Powerhouse
There are more than 25 deposits of oil shale in Israel, but only the southern plain (Shfela) deposit holds the potential to bring Israel to energy independence and liberate Israel from the dependency in foreign oil. This is due to the unique geological conditions of this deposit – its size, its richness (high quality of oil shale), its depth, and the hydrological isolation from the aquifer below and from the surface above. The deposit is optimal for In-Situ extracting, and the option to deploy this method provides tremendous environmental advantages, versus other methods of shale oil extraction.
In July 2008, IEI was granted a research, development and demonstration license at the southern Shfela Basin. The license gives IEI the right to explore the area for oil (as defined in the law), including the exclusive rights to perform survey drilling and experimental oil production (pilot).
IEI is obligated to execute a detailed work plan which is an integral part of the terms of the license. Once IEI reaches to a "Discovery", IEI will be entitled to a long term lease – on a selected portion of the license area.
License under the petroleum law does not exempt the holder from any other laws, including planning laws and environmental laws. Moreover, the license held by IEI specifically states that.
All of the wells drilled by IEI were approved by the respective district planning and building committees (Jerusalem and Southern districts). The approval process entailed extensive coordination with the Ministry of Environmental Protection, the JNF, local authorities, etc. The survey drillings were also authorized by the drilling committee of the water authority, which operates under the Water Law and includes members from the Ministry of Environmental Protection, Ministry of Health, the National Park Authority, the geological institute, etc.
Wednesday, October 19, 2011
$27 Trillion Israeli Oil
$27 Trillion Israeli Oil
information regarding a mammoth $27 trillion oil discovery has been found in a huge Israeli ‘Oil Vault’. It could be the second largest ‘Oil Vault’ in the world…
“And ONE tiny, little-known Canadian company recently won the rights to a sizeable piece of Israel’s massive oil find….
“The Beginning of the End for Money-Grubbing OPEC…
“Israel discovers what could be the 2ND LARGEST ‘Oil Basin’ in the world… officially giving OPEC the ‘middle finger.’”
“According to the World Energy Council, Israel’s massive oil discovery could ultimately yield as many as 250 billion barrels of oil … worth over $27 trillion.”
“… this could turn Israel into one of the world’s leading oil producers.”
Man, if we think the fight over borders and security between Israel and its neighbors is bad now … just wait and see how bad it gets if it turns out the land is actually worth something.
He quotes Dr. Vinegar, who used to be at Royal Dutch Shell and is now with Israel Energy Initiatives, as saying that this might give Israel oil reserves that are second only to Saudi Arabia — and far larger than the remaining reserves in the Saudi Ghawar field.
We’re told that the oil was unreachable until fracking made this oil discovery, which is “under Israel’s sacred ground,” accessible at a reasonable cost.
And yes, as usual, there’s a “tiny Canadian company” in the profit crosshairs over this, according to Mr. King:
“I was ecstatic when I uncovered ONE tiny, little-known Canadian company that recently won the rights to a sizeable piece of Israel’s MASSIVE oil find.”
It’s a company that has a market cap of under $75 million (which, since the ad has been running for a couple days, has probably changed — it doesn’t take much attention to spike a tiny stock), with a stock price under 85 cents per share. And that has a $2.76 billion oil find.
Notice that $2.76 billion? Yes, that’s much, much smaller than $27 trillion … though it still sounds quite impressive compared to a $75 million market cap.
There have been two major oil and gas stories from Israel in the last couple years — the first was the discovery of the Leviathan field, found and being exploited by Noble Energy and Delek, which itself was just the most recent iteration of several discoveries in the eastern Mediterranean, where commercial gas production has been underway for six or seven years. The next gas field coming online is the Tamar field, and it’s expected that production from the Leviathan field and other potentially larger finds in the Levant basin, most of which is in Israeli waters, will proceed apace.
But that’s mostly natural gas — which is obviously important, and could bring Israel some energy security and even turn them into an energy exporter in fairly short order … but it’s not as sexy or profitable as a big oil discovery would be, given the relative pricing of those two commodities.
So the second attention-getting story was that Israel can possibly become a major oil shale player — which is where the story of the $27 trillion and the 250 billion barrels of oil comes from, the stories that really headline this ad.
This is not shale oil that’s extracted by fracking, as we find in the Bakken — flipping those words makes a big difference. This is oil shale, oil that is not trapped by rock layers but that is actually embedded in the rock (that’s probably not exactly accurate, this is just the best way I can describe it). It’s an important distinction — oil shale is found around the world, including huge potential reserves in Colorado, Russia and elsewhere, and the latest oil shale discoveries in Israel put them in the top tier of potential, estimates that I’ve seen say they have the third largest oil shale field … but no one is going out of their way to explore for oil shale, since it hasn’t been particularly feasible to extract it in commercial quantities.
Companies keep trying, and this general idea has been teased before particularly for those Colorado projects, which have been attempted since the 1970s with no real success, but so far no dice.
The problem with oil shale is that the only way you can really separate the oil from the shale is with heat — so most projects have been designed to superheat the shale either underground or after mining it, to extract the oil, which is obviously both very technically challenging and very energy intensive. To my inexpert mind it seems sort of like the Canadian oil sands, only more difficult and extreme, and no one has so far decided that it’s worth turning the Rocky Mountains into rubble in order to extract the oil trapped in the rock via mining, so “in situ” solutions have been the focus of study and pilot projects.
This is very different from shale oil, which has been relatively easy to extract thanks to new horizontal drilling and fracking technologies, and which has turned North Dakota into a booming state ripe with oil millionaires — shale oil is more like shale gas, it’s in there and liquid, you just have to figure out how to release it from the less permeable rock that traps the hydrocarbons, which is what high-pressure fracking does — it blasts holes in the rock and the proppants hold those holes open, and then the gas and/or oil can escape up the drill pipe.
As far as I know no one has talked about hydrofracking in Israel, this big 250 billion barrel find is all about oil shale, the hard stuff.
So which company is King pitching here? Well, when we get into the details it turns out that King’s promo was a bit, well, disingenuous. That’s fancy talk for “misleading.”
Because when he teases the specific company details, here’s what we learn:
This small firm’s Israel position is just a small part of their portfolio, they apparently have oil and gas interests in Colombia, Brazil, Argenitna, the United States, and Canada.
And they have just 15% of this giant Israeli oil field, which King says is estimated by USGS at 1.7 billion barrels.
So what happened to that 250 billion barrels and 27 trillion dollars, you ask? That’s where it’s a bit misleading.
Because King mentions that the properties around this company’s project also have a ton of natural gas. He said USGS estimated 122 trillion cubic feet alongside this tiny Canadian company’s holdings.
Which means that this stock is not at all involved with Israel’s way-in-the-future oil shale potential, that “maybe as big as Ghawar” oil shale field with potential for 250 billion barrels that’s largely located to the southwest of Jerusalem, and which was what got us excited about the $27 trillion stuff.
No, this one is involved in a small portion of the offshore Israeli licenses covering the Leviathan field and the rest of the eastern Mediterranean — an area that does, indeed, have estimated technically recoverable but undiscovered oil of about 1.7 billion barrels, according to the USGS. And that, also according to this same USGS estimate from last year, has about 122 trillion cubic feet of natural gas. Note that this is what the USGS thinks should be there and recoverable, not what has been found — and the folks at the USGS don’t have to worry about their share price if they’re wrong.
So that means for this teaser we’re looking at a little company that does indeed have a 15% share of some offshore oil fields in the eastern Med, a company called Brownstone Energy (BWN in Toronto, BWSOF on the OTCQX, the high class section of the pink sheets).
Brownstone is a global company, though a teensy one — their two core assets are shares in licenses offshore Israel and blocks in Colombia. The Israeli stuff is all offshore, and it includes two blocks in the deep water where they have a 15% working interest that are between the Gaza Strip and the huge Leviathan discovery, along with some others that are closer to Leviathan and on which they have far smaller working interest (less than 1% for the two most exciting areas, which combined, they say have over 7 trillion cubic feet of risked gas potential), and a 6.75% stake in the Samuel block that’s immediately offshore in shallow water.
They believe that either their Colombian assets or the Israeli assets could be “company makers,” though they appear to be further along with the Colombian blocks — and with the joint ventures in both of these countries they have been able to get experienced operators on board to do much of the work and keep their costs relatively low. They also have joint ventures in Quebec, Argentina, Brazil, India, Oregon, and Colorado — so the teaser matches that as well, though those projects are either so small or so preliminary that they aren’t even included in the latest corporate presentation.
The company has some pretty good connections, particularly because their Chairman and CEO is also the founder, Chair and CEO of the natural resources venture capital firm Pinetree Capital, Sheldon Inwentash (Pinetree and Intenwash together held about 15% of Brownstone shares as of last year). And I like the general idea of working in the prospective Israeli and Colombian energy patches, as well as the idea of having joint venture partners in these kinds of projects, but I don’t actually know much more about Brownstone Energy than that — interesting, but I don’t know that they’re particularly close to announcing huge news (there is continuing exploration going on in most of their major blocks this year, both seismic and some drilling) … and I do know that they aren’t anywhere near Israel’s 250 billion barrel oil shale assets.
Which is probably a good thing, given that the huge oil shale field will be many, many years from development even if they can get a pilot project to work — the pilot is apparently underway now, but unless I’ve misread the articles on this it sounds like it will require heating the rock for two years before they produce anything. That oil shale stuff, by the way, is being done by that same group mentioned in the teaser, Dr. Vinegar’s Israel Energy Initiatives, which sounds like a government agency but is in fact the Israeli oil shale pilot project owned by Genie Oil & Gas, which itself is a division of the mostly-telecom company IDT Corp (IDT). Phew. The basics of that oil shale project (and the big picture for the offshore blocks) are touched on in this article, if you’re curious to know more.
Brownstone’s latest investor presentation goes into the details of their Israeli and Colombian assets pretty well, and according to the latest quarterly report their balance sheet looks quite clear and they should have enough cash on hand to cover their planned exploration costs in at least one of those countries this year, though probably not both. It wouldn’t be surprising to see them raise some more money soon — particularly if King’s recommendation helps their share price to stay elevated, though there are also some near-the-money warrants expiring over the next year or so that could bring in additional capital.
So … are you excited about Brownstone Energy? Prefer other ways to play the oil and gas potential of either Colombia or Israel?
information regarding a mammoth $27 trillion oil discovery has been found in a huge Israeli ‘Oil Vault’. It could be the second largest ‘Oil Vault’ in the world…
“And ONE tiny, little-known Canadian company recently won the rights to a sizeable piece of Israel’s massive oil find….
“The Beginning of the End for Money-Grubbing OPEC…
“Israel discovers what could be the 2ND LARGEST ‘Oil Basin’ in the world… officially giving OPEC the ‘middle finger.’”
“According to the World Energy Council, Israel’s massive oil discovery could ultimately yield as many as 250 billion barrels of oil … worth over $27 trillion.”
“… this could turn Israel into one of the world’s leading oil producers.”
Man, if we think the fight over borders and security between Israel and its neighbors is bad now … just wait and see how bad it gets if it turns out the land is actually worth something.
He quotes Dr. Vinegar, who used to be at Royal Dutch Shell and is now with Israel Energy Initiatives, as saying that this might give Israel oil reserves that are second only to Saudi Arabia — and far larger than the remaining reserves in the Saudi Ghawar field.
We’re told that the oil was unreachable until fracking made this oil discovery, which is “under Israel’s sacred ground,” accessible at a reasonable cost.
And yes, as usual, there’s a “tiny Canadian company” in the profit crosshairs over this, according to Mr. King:
“I was ecstatic when I uncovered ONE tiny, little-known Canadian company that recently won the rights to a sizeable piece of Israel’s MASSIVE oil find.”
It’s a company that has a market cap of under $75 million (which, since the ad has been running for a couple days, has probably changed — it doesn’t take much attention to spike a tiny stock), with a stock price under 85 cents per share. And that has a $2.76 billion oil find.
Notice that $2.76 billion? Yes, that’s much, much smaller than $27 trillion … though it still sounds quite impressive compared to a $75 million market cap.
There have been two major oil and gas stories from Israel in the last couple years — the first was the discovery of the Leviathan field, found and being exploited by Noble Energy and Delek, which itself was just the most recent iteration of several discoveries in the eastern Mediterranean, where commercial gas production has been underway for six or seven years. The next gas field coming online is the Tamar field, and it’s expected that production from the Leviathan field and other potentially larger finds in the Levant basin, most of which is in Israeli waters, will proceed apace.
But that’s mostly natural gas — which is obviously important, and could bring Israel some energy security and even turn them into an energy exporter in fairly short order … but it’s not as sexy or profitable as a big oil discovery would be, given the relative pricing of those two commodities.
So the second attention-getting story was that Israel can possibly become a major oil shale player — which is where the story of the $27 trillion and the 250 billion barrels of oil comes from, the stories that really headline this ad.
This is not shale oil that’s extracted by fracking, as we find in the Bakken — flipping those words makes a big difference. This is oil shale, oil that is not trapped by rock layers but that is actually embedded in the rock (that’s probably not exactly accurate, this is just the best way I can describe it). It’s an important distinction — oil shale is found around the world, including huge potential reserves in Colorado, Russia and elsewhere, and the latest oil shale discoveries in Israel put them in the top tier of potential, estimates that I’ve seen say they have the third largest oil shale field … but no one is going out of their way to explore for oil shale, since it hasn’t been particularly feasible to extract it in commercial quantities.
Companies keep trying, and this general idea has been teased before particularly for those Colorado projects, which have been attempted since the 1970s with no real success, but so far no dice.
The problem with oil shale is that the only way you can really separate the oil from the shale is with heat — so most projects have been designed to superheat the shale either underground or after mining it, to extract the oil, which is obviously both very technically challenging and very energy intensive. To my inexpert mind it seems sort of like the Canadian oil sands, only more difficult and extreme, and no one has so far decided that it’s worth turning the Rocky Mountains into rubble in order to extract the oil trapped in the rock via mining, so “in situ” solutions have been the focus of study and pilot projects.
This is very different from shale oil, which has been relatively easy to extract thanks to new horizontal drilling and fracking technologies, and which has turned North Dakota into a booming state ripe with oil millionaires — shale oil is more like shale gas, it’s in there and liquid, you just have to figure out how to release it from the less permeable rock that traps the hydrocarbons, which is what high-pressure fracking does — it blasts holes in the rock and the proppants hold those holes open, and then the gas and/or oil can escape up the drill pipe.
As far as I know no one has talked about hydrofracking in Israel, this big 250 billion barrel find is all about oil shale, the hard stuff.
So which company is King pitching here? Well, when we get into the details it turns out that King’s promo was a bit, well, disingenuous. That’s fancy talk for “misleading.”
Because when he teases the specific company details, here’s what we learn:
This small firm’s Israel position is just a small part of their portfolio, they apparently have oil and gas interests in Colombia, Brazil, Argenitna, the United States, and Canada.
And they have just 15% of this giant Israeli oil field, which King says is estimated by USGS at 1.7 billion barrels.
So what happened to that 250 billion barrels and 27 trillion dollars, you ask? That’s where it’s a bit misleading.
Because King mentions that the properties around this company’s project also have a ton of natural gas. He said USGS estimated 122 trillion cubic feet alongside this tiny Canadian company’s holdings.
Which means that this stock is not at all involved with Israel’s way-in-the-future oil shale potential, that “maybe as big as Ghawar” oil shale field with potential for 250 billion barrels that’s largely located to the southwest of Jerusalem, and which was what got us excited about the $27 trillion stuff.
No, this one is involved in a small portion of the offshore Israeli licenses covering the Leviathan field and the rest of the eastern Mediterranean — an area that does, indeed, have estimated technically recoverable but undiscovered oil of about 1.7 billion barrels, according to the USGS. And that, also according to this same USGS estimate from last year, has about 122 trillion cubic feet of natural gas. Note that this is what the USGS thinks should be there and recoverable, not what has been found — and the folks at the USGS don’t have to worry about their share price if they’re wrong.
So that means for this teaser we’re looking at a little company that does indeed have a 15% share of some offshore oil fields in the eastern Med, a company called Brownstone Energy (BWN in Toronto, BWSOF on the OTCQX, the high class section of the pink sheets).
Brownstone is a global company, though a teensy one — their two core assets are shares in licenses offshore Israel and blocks in Colombia. The Israeli stuff is all offshore, and it includes two blocks in the deep water where they have a 15% working interest that are between the Gaza Strip and the huge Leviathan discovery, along with some others that are closer to Leviathan and on which they have far smaller working interest (less than 1% for the two most exciting areas, which combined, they say have over 7 trillion cubic feet of risked gas potential), and a 6.75% stake in the Samuel block that’s immediately offshore in shallow water.
They believe that either their Colombian assets or the Israeli assets could be “company makers,” though they appear to be further along with the Colombian blocks — and with the joint ventures in both of these countries they have been able to get experienced operators on board to do much of the work and keep their costs relatively low. They also have joint ventures in Quebec, Argentina, Brazil, India, Oregon, and Colorado — so the teaser matches that as well, though those projects are either so small or so preliminary that they aren’t even included in the latest corporate presentation.
The company has some pretty good connections, particularly because their Chairman and CEO is also the founder, Chair and CEO of the natural resources venture capital firm Pinetree Capital, Sheldon Inwentash (Pinetree and Intenwash together held about 15% of Brownstone shares as of last year). And I like the general idea of working in the prospective Israeli and Colombian energy patches, as well as the idea of having joint venture partners in these kinds of projects, but I don’t actually know much more about Brownstone Energy than that — interesting, but I don’t know that they’re particularly close to announcing huge news (there is continuing exploration going on in most of their major blocks this year, both seismic and some drilling) … and I do know that they aren’t anywhere near Israel’s 250 billion barrel oil shale assets.
Which is probably a good thing, given that the huge oil shale field will be many, many years from development even if they can get a pilot project to work — the pilot is apparently underway now, but unless I’ve misread the articles on this it sounds like it will require heating the rock for two years before they produce anything. That oil shale stuff, by the way, is being done by that same group mentioned in the teaser, Dr. Vinegar’s Israel Energy Initiatives, which sounds like a government agency but is in fact the Israeli oil shale pilot project owned by Genie Oil & Gas, which itself is a division of the mostly-telecom company IDT Corp (IDT). Phew. The basics of that oil shale project (and the big picture for the offshore blocks) are touched on in this article, if you’re curious to know more.
Brownstone’s latest investor presentation goes into the details of their Israeli and Colombian assets pretty well, and according to the latest quarterly report their balance sheet looks quite clear and they should have enough cash on hand to cover their planned exploration costs in at least one of those countries this year, though probably not both. It wouldn’t be surprising to see them raise some more money soon — particularly if King’s recommendation helps their share price to stay elevated, though there are also some near-the-money warrants expiring over the next year or so that could bring in additional capital.
So … are you excited about Brownstone Energy? Prefer other ways to play the oil and gas potential of either Colombia or Israel?
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