The Jerusalem Post reported this week on an assessment from the Swiss based financial services giant UBS, that a significant oil find could have a greater impact to Israel's economy than the recent massive natural gas discoveries offshore. UBS analysts, Roni Biron, Ziv Tal and Reinhard Cluse wrote in a report on the Israeli gas and oil sector that: "Our calculations suggest that, in the event of success, oil could potentially deliver a boost to GDP growth, the budget and the external balance that might potentially be even bigger than the impact from natural gas.
"This would also imply a larger appreciation potential for the shekel and an even greater requirement to manage the resulting macroeconomic challenges through a carefully managed sovereign-wealth fund."
Simply put, UBS analysts are saying that discovering oil could mean more to Israel's economy, trade balance, domestic budget, value of the shekel and long term national wealth than the recent gargantuan offshore natural gas finds that will make Israel both import independent and a major exporter. Not to mention (they didn't) that being oil and gas independent would add significantly to Israel's national security.
The UBS analysts reminded readers that the Leviathan and Tamar fields were the world's largest gas discoveries in the past decade, that Tamar would be sufficient for all of Israel's domestic needs, making Leviathan available for 100% export. They reported, "natural- gas exports from the Leviathan field will begin in 2017 at almost $3 billion per year, before rising to almost $6 billion in 2020."
$6 billion per year from natural gas exports - that's significant! What's more significant is that the UBS report was about how a oil could have a greater impact.
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