Chevron, the American oil giant, wrapped up the acquisition on Monday of a relatively small Houston-based company called Noble Energy, paying about $4 billion.
Until recently, the deal would have been unlikely, if not unthinkable — because what distinguishes Noble is the large natural gas business it has built in the eastern Mediterranean Sea, especially in Israel, an area that major oil companies had until now avoided.
Chevron’s move is the latest milestone in a remarkable shift in perceptions about a relatively new region for the petroleum industry in the eastern Mediterranean. Once a dead sea for the oil industry, this area, reaching from the Nile Delta in Egypt up to Israel and Lebanon and around Cyprus, has come alive with exploration vessels, drilling rigs and production platforms in recent years thanks to a series of large natural gas discoveries.
Those finds are drawing major oil companies into the area, attracted not only by the prospect of further undiscovered resources but by improving relations between Israel and its former foes Egypt and Jordan.
“This is an area that looks as if it could have the resource quality and the scale to become a pretty significant energy province,” said Mike Wirth, Chevron’s chief executive, in an interview.
International oil giants previously steered clear of Israel, partly, it has been assumed, to avoid alienating large Arab oil producers like Saudi Arabia. The move by Chevron, which this week edged ahead of Exxon Mobil to become America’s largest oil company by market value, indicates that the days when Persian Gulf states bristle about business with Israel may be over. Recently, the United Arab Emirates and Bahrain established relations with Israel with apparent Saudi blessing.
“It is opening up the Israeli market to the world,” Nati Birenboim, a former Israeli energy official who is now a consultant, said of Chevron’s arrival. “Everyone knows when they bought Noble, they bought Israel.”
There are no guarantees that recent progress on energy and other fronts won’t face setbacks. Longstanding differences between Israel and its neighbors are not forgotten; expansionist moves by Turkey and its president, Recep Tayyip Erdogan, to claim some of the underwater riches have alarmed its NATO allies and recently prompted the United States to deploy a massive Navy ship at a base it shares with Greece.
More than 20 years ago, Noble helped put the region on the energy industry’s map. Delek Drilling, an Israeli firm, brought the company to Israel to hunt for petroleum. The partnership, which began in 1999, has produced major natural gas finds that not only reduced Israel’s dependence on imported coal and oil but turned Israel — with some helpful nudging from American diplomats — into an exporter with long-term contracts worth an estimated $25 billion to help power the neighboring economies of Jordan and Egypt.
“I think what Chevron sees is the opportunity” to buy into “massive natural gas resources located in the center of a region with a lot of demand,” said Yossi Abu, Delek’s chief executive and now Chevron’s partner, in an interview.
Along with the drilling sites off the coast of Israel, a major discovery called the Zohr gas field, found by the Italian energy company Eni in Egyptian waters in 2015, has drawn development in the area. Total, the French oil firm, and Eni have even extended the hunt into the sea off strife-torn Lebanon — although the first well the partners drilled, this year, turned out to be a dry hole.
From a geological point of view, the eastern Mediterranean has what oil giants like Chevron are looking for: very large volumes of gas, which many in the industry view as likely to have a better future than oil as climate change concerns grow.
“It is a very attractive region,” said Wayne Ackerman, a former executive at Royal Dutch Shell and an adviser on gas to Saudi Aramco, who has studied the area’s geology. “I am convinced there will be more discoveries there,” added Mr. Ackerman, who now heads gas research at Rapidan Energy Group, a consulting firm.
The energy business has been shaken by plummeting demand during the coronavirus pandemic and worries about the viability of fossil fuels. But the resources that these big fields hold are unlikely to be left in the ground, because they are already earning substantial revenues by powering the economies of Israel and its neighbors. Some of the fields in the region, including the largest Israeli field, in which Chevron now holds a nearly 40 percent stake, could also be expanded relatively cheaply for exports.
“Gas is an important part of any future energy transition scenario,” Mr. Wirth said. “Proximity to growing markets with demand is a real advantage for a gas…
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