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Israel: The oil of Zion

Prophecy and science converge in Israel's oil and gas boom.

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An Israeli employee works at Zion Oil and Gas company's oil-drilling platform in Israel's onshore rig in Maanit in 2009. (Jack Guez/AFP/Getty Images)

CAESAREA, Israel — John Brown first came to Israel in 1983 with visions of striking oil. He didn’t care that geologists had written off that possibility as absurd.

Already a successful manufacturing executive, Brown was a recently born-again Christian when he boarded a flight for Jerusalem. The words of Christian evangelist Jim Spillman were fresh in his mind: “The Bible tells us that God has left us petroleum in Israel.”

“I read the scriptures and it seemed to be pretty clear to me that there was evidence of hydrocarbons in Israel,” said Brown, who is now 71 years old.

Oil industry insiders mocked Brown for years, laughing that he had picked the only country in the Middle East without any oil.

It turned out, of course, that Brown was right all along.

Almost 30 years later, he is the founder of Texas-based, NASDAQ-traded Zion Oil and Gas. The company, founded in 2000, operates exploratory wells in Israel. Its stock price has been boosted by a string of discoveries beginning in 2009 that confirm some of what Brown had been saying from the start.

“Everybody accepts now that there are large deposits of hydrocarbons in and around Israel,” said Richard Rinberg, an Orthodox Jew who has served as Zion’s CEO since 2005. “And everybody’s drawn to the area now — the hot money is coming in. The geology confirms the theology.”

The United States Geological Survey announced last year that the Mediterranean waters off Israel’s coast contain 1.7 billion barrels of extractable petroleum and 122 trillion cubic feet of natural gas — enough to radically transform Israel’s geopolitical fortune this century. The country’s longstanding desire for energy independence has only been accelerated by the recent instability in Egypt, which supplies 40 percent of Israel’s natural gas.

Zion Oil’s board of directors, which includes a former Chevron executive and the chairman of the Railroad Commission of Texas, has attempted to balance their religious motivations with the exacting standards of business and science.

They all agree that central to their mission is helping Israel become more stable and energy independent.

“We’re just a bunch of guys who really love Israel,” Brown said.

“As in a great book, you can come at it from any direction you wish,” said Rinberg, who moved his family to Israel from England in 1996. “John Brown came from Biblical understanding. To run a corporation in the 21st century, you need to do scientific investigation and use high-tech techniques.”

But the company – which has the motto: “A special company ... A special task ... A special country” – is still waiting for its big find. Much larger companies, meanwhile, are enjoying huge success. The Texas-based multinational, Noble Energy, is preparing to extract trillions of cubic feet of natural gas from its recently discovered Tamar and Leviathan fields near Haifa.

Tamar alone is expected to meet Israel’s own gas needs for at least three decades, while the much larger Leviathan could make Israel an exporter for the first time in its history as soon as next year. Tax revenues from the gas could amount to $500 million a year.

“Frankly the only thing we’re missing is a discovery to announce,” Rinberg said, expressing an optimism that’s become one of Zion Oil’s trademarks.

The state of affairs in Israel has changed drastically since 2003, when Rinberg first got involved in Zion as a venture capitalist.

“I found the idea of oil in Israel compelling on a number of levels, both business and spiritual,” Rinberg said. “Before the Tamar discovery in January 2009, when I would tell people what I was doing, it was not uncommon for them to burst out laughing.”

These days, several of Zion’s competitors are laughing with delight. Just south of where Zion’s drilling rights end, Jerusalem-based Givot Olam discovered one of the country’s largest onshore oil fields, Meged, in 2004. Producing since last year, Meged contains an estimated 1.5 billion barrels of oil at the “Megged 5” well a few miles east of Tel Aviv.

“For many years we drilled wells without success,” said Tuvia Luskin, Givot’s founder. “Megged 5 is an event like the giving of the Torah.”

http://www.globalpost.com/dispatch/news/regions/middle-east/israel-and-palestine/110501/israel-oil-gas-egypt