Israel's Givot Olam Halts Drilling at Meged field

    By Sara Toth Stub 
    Special to DOW JONES NEWSWIRES 

JERUSALEM--Israeli energy exploration company, Givot Olam Oil Exploration L.P.(GIVO.L.TV) said Monday it would halt drilling at its Meged field in central Israel due to jammed pipes, just weeks after it discovered a flow of oil at the field.

The company said it didn't know when drilling would resume or what the impact of the suspension on its budget would be.

In November, Givot Olam said it discovered a flow of oil, at a rate of about five barrels per minute, at its Meged field. According to its most recent estimate, Givot Olam said the field may contain up to 7.8 million barrels of oil.

The suspension delivers yet another blow to Israel's developing energy sector. It follows news last week that drilling would be delayed in the country's large offshore Leviathan gas field, controlled by Delek Group Ltd. (DLEKG.TV) and U.S.- based Noble Energy Inc. (NBL).

Givot Olam was founded by Jewish geologist Tovia Luskin, who claims that the Bible promises oil will be found in Israel. The company began looking for oil in Israel in 1992 and found the Meged reserve in 2004. Significant quantities of oil haven't been found previously in Israel. In recent years, however, large, commercial quantities of natural gas have been discovered offshore Israel, including the Leviathan field.

These increased natural gas reserves have in recent months boosted the Israeli shekel, spurring market intervention and interest rate cuts by the central bank.

At 0947 GMT, shares of Givot Olam were down 0.004 shekels, or 8.9%, at ILS0.041 ($0.012) in a lower Tel Aviv market.

-Write to Sara Toth Stub at [e-mail]

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