Twenty-three years after he got a taste of oil off the shores of Ashkelon, Yossi
Levy has unfinished business.
As the head of the government- run Naphtha
company in 1988, Levy was part of a team that drilled deep into the
Mediterranean Sea and discovered black gold. But the project, which relied on
the secret cooperation of US-based Occidental Petroleum at a time when the Arab
boycott of Israel was in full swing, hit a wall in 1990.
“They found oil,
but they couldn’t continue because the temperature and the pressure were too
high and it was impossible to continue drilling,” Levy told The Jerusalem Post
on an industrial boat near the old drilling site on Thursday.
squeezed out 800 barrels, he says, as the price of oil dropped, searching for
deep-sea oil became a poor business proposition, and the industry turned its
attention to natural gas.
“They stopped and they said, ‘Okay, we’ll come
back to it in the future,’ but in the future they never came back!” Now, with
oil prices back up and significant advances in technology to help overcome the
technical difficulties in the exploration, Levy has returned to his old drilling
grounds to finish the task he started all those years ago.
In 2011, he
signed on as CEO of Shemen Oil and Gas Exploration and commenced drilling in the
Yam-3 field in December of the following year.
“I didn’t think I’d come
back here, but when the time came I knew this is the project I want to join. I
want to find oil in Israel’s waters, so I hope I’ll be the first to find oil,”
To do so, the company pulled in the Atwood Beacon ocean rig.
Rising out of the sea 16 kilometers off the Ashdod coast, the rig, which has
been dragged from India to South America before coming to Israel, has been
drilling since December, though a technical snag along the road halted the
process for several weeks (and drove the cost from $22 million to $138m.,
forcing the company to raise more funds).
Though Levy had drilled 5,300
meters down in the past, “the last 500 meters are always the
The 170 degree centigrade underground heat and immense pressure
on the pipes do not help. And while the history of oil in the area is a good
sign, just finding it will not be enough.
“We’ll find oil, but the
problem is its commercial viability: The size, the quantity. At sea you need a
minimum quantity to produce. There’s a certain bound under which there is no
point in producing, even at $100 a barrel,” Levy said.
An NSAI study
commissioned by the company estimates that there are 120 million barrels of oil,
a quantity that Levy says could net $20 billion to $24b. in licenses. If nothing
goes wrong, drilling should wrap up this month and the results should be in by
“I think it’s very important – not just economically, but
strategically – to become energy independent,” said Gabi Ashkenazi, a former IDF
chief of staff who serves as chairman of the company.
But what if that
oil isn’t there? “I try not to think about it,” said Levy. Even if there is
barely a drop of oil to be found, there is a chance of finding more of the
natural gas that has recently come onto the market.
“What’s wrong with
gas?” Levy said with a smile. “Gas [is] good too!”