Has Israel Turned Into a Natural Gas Superpower?

An interview with Yossi Langotsky, an Israeli geologist who has for decades searched for natural gas and oil in Israel and around the globe.

Assa Sasson
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Assa Sasson

Yossi Langotsky is an Israeli geologist who has for decades searched for natural gas and oil in Israel and around the globe. He has served as CEO of a number of oil and natural-gas exploration companies, including a stint as head of the Israel National Oil Company. His name became known after the discovery of natural gas in the Mediterranean, and due to the Dalit 1 drilling project off the Hadera coast. This project was named after his daughter; another project off the Haifa coast, Tamar 1, was named after his oldest grandchild.

Yossi LangotskyCredit: Dan Keinan

Have we turned into a natural gas superpower?

I distinguish between drilling at sea and drilling on land. At sea there has been the huge gas discovery at Tamar; there is a chance to solve Israel's energy problems for the next several decades. A year ago I would be stopped on the street and asked, "Tell me, is this story about natural gas serious?" Today, however, it's clear to everyone that these are serious discoveries. This is serious business.

Is there one big winner in the exploration for natural gas at sea, or is it a case of whoever finds gas will make a profit?

The Nobel Energy consortium, which possesses a series of drilling permits, is the big winner. Beyond its status as an international company with experience, knowledge and a strong economic backbone, it has the ability to establish and operate a system for delivering gas. If gas is found at the Leviathan drilling site, all that will be left to do is to connect it to the delivery system at Tamar and the gas will reach land.

That is, Nobel Energy is a few steps ahead of everyone. All other companies that join the search for gas after the Tamar discovery will face major problems. First, a gas delivery system such as the one at Tamar entails a hefty investment of $3 billion. Second, these [competitors] would face a marketing problem - there would be nobody to purchase the gas. People don't understand that the rules of the game have changed.

What do you mean that the rules of the game have changed?

Even if there are new gas discoveries at sea, and even if [other companies] manage to deliver gas to land, there will be a need to liquefy the gas on land and deliver it from Israel's coast to world markets. Again, this a complicated, expensive process, and the Nobel Energy consortium already has a huge advantage. Competitors who find oil reserves would be in better shape; such reserves don't require delivery to the coast. I worry that all these new explorers who are looking for gas in the Mediterranean are not aware of the problems I've cited.

Is there oil in the Mediterranean?

I am convinced that there will be oil discoveries in the Mediterranean. In geological terms, there is every reason to assume that there are such reserves; the problem is finding them. First of all, bear in mind that oil has already been found in the Mediterranean. The first time occurred in 1985, when the French company Total drilled north of the Sinai Peninsula and found tens of thousands of barrels a day of quality oil. But in two subsequent drillings, Total came up dry, so it could not develop an oil region.

The second drilling took place in 1995; Isramco looked for oil off the Tel Aviv coast at a depth of 5,000 meters. They extracted 800 barrels of quality oil a day, but the project would not have been profitable economically.

What will happen to all the new companies that explore for natural gas?

Some of the new companies that have started exploring in the Mediterranean lack appropriate professional backgrounds; to the best of my knowledge, they lack an understanding of the new "rules of the game." Beyond that, the National Infrastructure Ministry has been asleep; it issued permits to many entities that lack experience in oil exploration. Some of them peddle these permits, I think. That's a sin.

Up to now, you've talked about the sea. Is there oil and gas on land?

To the best of my knowledge and experience, there is just a slim chance of making a major discovery on land. The only region that has potential of a find is around the Dead Sea, an area that has unique geological characteristics.

What is the drilling at Megged 5 about?

The drilling on the hills at the Rosh Ha'ayin site is based on a prospectus that was put together by a national exploration company in the 1980s under the direction of Dr. Charlie Druckman. Structures similar to the one at Rosh Ha'ayin exist at five other spots in Israel; each has been drilled, and, up to now, each has been a disappointment.

I'm convinced that Megged 5 was a site that warranted all the investments that have been made. I also have great respect for the determination and perseverance of this [exploration]. But the time has come when it behooves the directors of the hills to tell their investors very clear, unequivocal things about the low probability of an economically profitable discovery.

You worked on a legislative initiative stipulating what an oil exploration company must divulge, is that right?

Look, what stirred me to act on this legislative initiative is the example of the unclear announcements made by Givat Olam [the company, concerning Megged 5]. As a professional, it seems to me that the time has come to put in place procedures on issuing reports - for example, when there are production tests, there should be no requirement of reporting until it is entirely clear what has or has not been found.

When the last report by Givat Olam was written by a lawyer, and not a professional, that, I think, was very strange. I hope a law will be passed defining what oil exploration companies must report, how they should report and what cannot be reported. Such a law would preempt confusion among investors.

[In recent years, Langotsky has been a partner in the company STX, along with businessman Benny Steinmetz. In this capacity, he initiated natural gas drilling off the Hadera coast (Dalit 1 ) and the Haifa coast (Tamar 1 ). STX held an option for 5 percent of the rights of the findings, but at Steinmetz's initiative the consortium pulled out, just a few months before the drilling at Tamar 1 yielded promising commercial amounts of gas.

Langotsky was unable to find a substitute investor, so he lost rights to some of the drilling's profits. This missed opportunity to enjoy the fruits of his labor, which occurred such a short time before the find at Tamar 1, piques curiosity. The matter is also now under arbitration.]

Are you disappointed that you aren't profiting from these discoveries?

Look, that pinches a little at the heart, but I have looked for oil all my life not to become a billionaire, but as a Zionist pioneering endeavor, the kind my parents undertook. I'm happy that I conferred to the Israeli people such an economic achievement, named after my daughter and granddaughter.

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