Israel's North Sea

Amiram Cohen

During the 1960s, Britain emerged from a deep economic crisis when it discovered large oil and gas deposits in the North Sea. Norway also prospered from its oil and gas reserves there. Early this year, Israel discovered its own North Sea between Hadera and Rosh Hanikra. The initiative to search for gas offshore was led by the American firm Noble Energy, which partnered with companies controlled by Yitzhak Tshuva, Joseph Maiman and David Wiessman. They uncovered a large undersea gas field, called Tamar. The field is believed to hold between 140 and 200 billion cubic meters of natural gas, worth between $25 billion and $30 billion. Last week we learned of the discovery of another field, Dalit, which may hold 20 billion cubic meters of natural gas, worth about $4 billion.

As a result, searches at as many as 20 other offshore sites are expected to accelerate. But even if there are no more finds, the deposits already uncovered have transformed Israel from an empire of traces of gas, as it has been ridiculed, to a gas territory. Tamar and Dalit guarantee Israel strategic gas reserves for at least two decades, end its dependence on external gas sources and give it power in negotiations with foreign suppliers. The country should also reap billions of dollars in revenues from taxes on firms that extract the gas and on the partners' profits in the venture. In addition, electricity companies will no longer rely on coal-fired power plants, which consume large and expensive beach fronts and pollute the atmosphere.

As an energy correspondent, I followed for over a decade the efforts of geologist Yossi Langotsky on his way to the big gas find. In the beginning, Langotsky found data in dusty drawers at the National Infrastructure Ministry suggesting large areas that might contain large quantities of oil or gas. He tried to interest international firms in these documents, assuming that only a large company would be able to carry out such a project - a challenge in both financial and technical terms. He also believed that only the participation of a foreign partner would attract local investors. Langotsky met with more than 100 managers and owners of international firms, who politely showed him the door. International petroleum companies never ventured to look for oil in Israel when 70 percent of all the world's known reserves were controlled by Arab and Muslim countries.

But Langotsky persisted and traveled the world until, much to the surprise of the petroleum community, he convinced British Gas to lead the initiative, with him serving as a consultant. After the search the company declared two sites as potentially containing large quantities of gas (Tamar and Dalit). This brought in local investors and the venture took off. But it was a difficult journey. Three of the local investors pulled out shortly before the start of drilling, and an even greater blow came when BG left Israel for what appears to be unrelated reasons.

Fearing that the venture would collapse, Langotsky sought an international firm to lead the effort. The solution was found with the Tshuva group that brought in Noble Energy, a partner of the Tshuva group in the gas venture Tethys Sea. Thus the venture's leadership was reclaimed by an experienced international group.

But Langotsky, the engine of the venture who had cracked the geological code of Israel's North Sea, failed to crack the business code and found himself out of the project. It would be just if Tshuva, Wiessman and the rest find a way to thank Langotsky and include him in the fruits of the venture. The state should also find a way to express its gratitude for Israel's energy discoverer.
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