Geologist Who Lost Out on Israeli Natural Gas Share Awarded NIS 50m in Compensation
After a three-year legal battle, a judge ruled Beny Steinmetz must pay former business partner Yossi Langotsky NIS 50 million compensation for causing him to lose his share in Israel's Tamar and Dalit gas prospects.
The geologist behind Israel's offshore natural gas field discoveries will be receiving NIS 50 million in compensation after a failed business partnership caused him to lose his share in the fields.
- Who owns Israel's natural resources?
- First natural gas, now Dead Sea minerals: Israel to set policy on natural resource royalties
- Israeli cabinet votes yea on natural gas export
The three-year-long arbitration process between geologist Yossi Langotsky and businessman Beny Steinmetz ended Wednesday morning as Judge Boaz Okun ruled that Steinmetz should pay Langotsky NIS 50 million for causing the latter to lose his share in the Tamar and Dalit gas prospects.
Langotsky was the driving force behind gas exploration off Israel's Mediterranean shore.
"I'm happy that Steinmetz, who behaved so inappropriately, will pay for it," said Langotzky.
Langotsky sued Steinmetz in 2010 after losing his shares. In December 2011, Okun ruled in a 145-page arbitration agreement that Steinmetz had violated his business partnership with Langotsky and thus should compensate him for the resulting damage. He did not name a sum at the time.
Langotsky had been demanding that Steinmetz pay him the value of the would-be 1% holding right before drilling began -- NIS 60 million.
In the late 1990s, after spending a year looking for international companies interested in exploratory drilling off Israel's shores, Langotsky convinced energy giant British Gas (now BG) that gas might be found there. BG gave Langotsky a 5% option on the rights to any future gas finds.
Langotsky then partnered with Steinmetz. Under their agreement, Steinmetz was to provide the funding for their share of the exploration and production process. If gas were to be found, then Steinmetz would receive 80% of the profits, with the rest going to Langotsky.
Eventually, drilling was set to begin in November 2008. But in September, Steinmetz decided to back out of the consortium, even though he had invested NIS 2.5 million in the project as of that time.