Legendary Israeli Wildcatter Bets on Finding Oil in Judean Desert

Multimillionaire Eliahu Rosenberg is the spirit behind new partnership looking for oil near the Dead Sea.

GPO

The many failures to find oil in the Judean Desert over the years have not deterred a new group of investors interested in restarting the exploratory wells near the Dead Sea.

The area to be explored is in the northeast part of the Negev, an area known as the Hatrurim License (based on the name of the geological formation in the region). Halamish 1 is an exploratory well near the Dead Sea, not far from the city of Arad. In 1962, Israel’s National Oil Company drilled 2,200 meters and found a number of sand layers bearing oil, gas and salty water, but they were never exploited.

More than three decades later, geologist Eliahu Rosenberg undertook an even deeper drilling of Halamish 1, but he and his partners decided not to pump the oil, because low world oil prices precluded the possibility of earning a profit on it. Halamish 1 was the last onshore well drilled by Rosenberg’s Avner Oil Exploration and his partner Yitzhak Tshuva’s Delek Drilling, before they discovered a series of giant offshore fields, the largest of them being Leviathan.

The latest effort to turn a barren spot of desert into Israel’s next oil patch is being led by the irrepressible Rosenberg, who, even in his 80s and officially retired, is still an active presence in the local energy industry.

Rosenberg has filed an application with the Energy and Water Resources Ministry for a license to search for oil in the Judean Desert area, together with Gulliver Energy, which controls the Zerah Oil & Gas Exploration and Ginko Oil Exploration partnership, Israel Opportunity Energy Resources and the Ashtrom Group. Gulliver, the biggest partner with a 62.5% share, is already searching for natural gas and oil on land in the Dead Sea region, where Zerah already has a license. The rest of the shares will be divided between Israel Opportunity (25%), Ashtrom (10%) and Rosenberg (2.5%).

Eyal Shuker, the CEO of Israel Opportunity, which also holds over 100 offshore exploration licenses in the Oz, Pelagic, Royee and Neta fields, is optimistic. “The financial strength of the partnership allows us to continue to search for opportunities, with the goal of expanding and diversifying our asset portfolio while spreading the risks,” he said. “Entry into the Hatrurim license is an opportunity to operate and develop a new license in an area that has already been proven in the past to have oil, and a large amount of geologic data about the area already exists,” added Shuker.

The partnership’s plan is to renew the drilling at Halamish 1, this time to a depth of 2,600 meters. The original well was drilled at an angle into what was expected to be the center of the oil formation. If for technical reasons they cannot reenter the well, the partners will drill 30 meters away from the original site.

Rosenberg’s career history doesn’t look very different from a Texas wildcatter, except that he was born in Germany and made his great discoveries – not to mention a sizable fortune – finding natural gas in Israel, or more precisely the Mediterranean Sea. Many consider him the pioneer of the natural gas discoveries in the eastern Mediterranean Basin, including the Tethys Sea, Mari and Noa fields.

As one of the founders of the Avner Oil Exploration partnership, which in Hebrew spells out the initials of his full Hebrew name, Rosenberg was also a partner in the discovery of the huge offshore Leviathan and Tamar gas fields. The company was later sold to Tshuva’s Delek Group, but Rosenberg continued to serve as its chief geologist. He was also a founder of Isramco and JOEL Jerusalem Oil Exploration, two other oil and gas exploration partnerships.

All these big gas discoveries have made Rosenberg a multimillionaire. He owned the rights to a 3% share of Avner’s revenues, an amount that was reduced to 2.625% after Delek took control of Avner in 2000. His share of the Tethys Sea field paid Rosenberg some $4 million.

But this is relatively small change compared to the many millions Rosenberg is expected to reap in coming years from the sale of the gas being pumped from the much larger Tamar and Leviathan fields.

As just one indication of the riches in store, Rosenberg recently sold a third of his share from Avner in these revenues to Allied – a closely held company controlled by Prof. Itzhak Swary – for an estimated $30 million to $40 million. Rosenberg is also expected to receive some $1 million to $1.5 million a year for his share of the revenues from Tamar. And when the gas flows for export from the Leviathan field, starting in 2018, he is expected to earn $1.5 million to $3 million a year, if not more.

All told, these sums are expected to add up to over $100 million over the years.