Beny Steinmetz Dives Back Into Deep-sea Gas

Billionaire tycoon heading group buying 50% of Pelagic exploration rights in 6 licenses

Diamond and mining tycoon Beny Steinmetz is making a comeback into Israel's offshore natural gas exploration arena, leading a consortium that purchased 50% of the rights in the six deepwater licenses held by Pelagic Exploration Company. The deal still requires the go-ahead of the National Infrastructure Ministry's Natural Gas Authority. The amount paid isn't known, but in September, the Israel Opportunity Energy Resources partnership bought a 10% share in the same group of licenses for $2.5 million.

Steinmetz is known for having blown a chance to participate in the Tamar and Dalit natural gas discoveries off the coast of Haifa. He shares his limited partnership, STX, with the initiator of the project in the two gas fields, renowned geologist Joseph Langotsky. STX had owned a 5% share in the rights of those drillings.

Steinmetz, however, backed out of the venture shortly before they hit pay dirt, which left Langotsky high and dry, being unable to find a replacement investor on such short notice.

The six licenses - Yishai, Aditia, Lala, Yahav, Yoad and Ayala - were acquired by Pelagic in March and extend to the end of February 2012. Their total area covers over 2,000 square kilometers and is situated between the Ratio Yam area, containing the Leviathan field, on the east, the Gal exploration permit area to the southwest, and Block 12 in Cyprus waters to the west.

Prentis Tomlinson, who led the negotiations for Pelagic, has since acquired a controlling share of the company alongside Edward Moses, while the previous owners were guaranteed 5% super royalties on any gas or oil found in its license areas.

Tzahi Sultan's Modi'in Energy, Nochi Dankner's IDB and Ratio Oil Exploration have all recently announced that they too are negotiating over a share of the licenses.

"This is a long-term strategic decision," said a statement by the Steinmetz group. "We see a large potential in Israel's oil and gas sector and intend to bring into play our rich experience in the fields of natural resource and gas mining. Our investment will be carried out with an eye toward finding international markets for the natural gas."

"We intend to act quickly after the announcement by the National Infrastructure Ministry of its new instructions for acquiring all the necessary permits for the project," the statement said, "and intend to work within a tight timeframe to perform the seismic testing and the exploratory drilling in order to remain on schedule."

"We are pleased to be partners with Pelagic and with EDC with their long experience with gas well exploration and drilling," the statement continued. "We are certain that cooperation between the parties will lead to building the optimal team for rising to the challenges facing us."