Israel's Covert Efforts to Secure Oil Supplies By Zvi Alexander
'Oil', Zvi Alexander's personal story, is also the story of the Israeli oil industry; how Alexander was the first to... More Below
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Israel's Covert Efforts to Secure Oil Supplies
Zvi Alexander was a member of a small group that established the oil industry in Israel, providing the State with this vital fluid, and searching for oil in Israel and other countries. 'Oil', Alexander's personal story, is also the story of the Israeli oil industry; how Alexander was the first to bring to Israel non-Jewish oil businessmen from the USA; how these businessmen, along with Israel's 'National Oil Company' under Alexander's management, funded and executed oil drilling in Israel; and how Alexander's activities brought 'Signal', an international oil company based in the USA, to invest a large amount of money in Israel's 'National Oil Company', despite the Arab embargo. After the Yom Kippur War, Alexander sold the company for $16.5 million.
Oil – Israel’s Covert Efforts to Secure Oil Supplies Zvi Alexander
Firstly, I should state that I know the author, and some of the events described in the book relate to the period in which we were jointly involved in oil exploration affairs. It was thirty years ago, during the stormy periods of the oil crises of the 1973 (following the Yum Kippur War) and 1977 (following the fall of the Shah in Iran) which cut the supply of Iranian oil to Israel. This was also the period of the negotiations for returning the Sinai oil fields to Egypt as part of the peace agreement. During that period Zvi Alexander was the Managing Director of the National Oil Company and I was the Director General of the Ministry of Development and then the Director General of Ministry of Energy. Zvi Alexander later became an independent entrepreneur in oil affairs.
I also had a chance to review the proofs of the recent English version (the book was originally published in Hebrew under the title “Oil,” by Yediot Acharonot Books) and I found the book, the plot, and the author fascinating enough to share my thoughts in print.
Oil production in the 60’s and 70’s was concentrated in Arab hands, even more so than today. The Arab boycott (of Israel) seriously hampered the supply of oil to Israel, and the 1973 energy crisis made matters even worse. Israel, like most other countries, made unrelenting efforts to ensure a continuous source of oil supply from diverse sources.
When describing Israel’s “unrelenting efforts”, the reader might think that there was a forum of wise sages who formulated a national strategy for safe supply of oil to Israel, which would have also included foreign oil exploration efforts. But this is not how it was (there were no wise sages and no strategy). The history of the Zionist movement and later the history of the State of Israel include obsessed individuals, each dedicated to his own particular field of endeavor, entrepreneurs by nature, all natural leaders with enormous willpower and the ability to produce results.
In the economy of the Zionist movement and later in the economy of the young, newly established State of Israel, there was virtually no private sector to speak of. Those obsessed individuals received, and often took upon themselves, new initiatives and gave themselves a mandate to engage in an area which they considered important (to the welfare of the State) and they ran with it. And this is how entire empires were built, few of them in the private sector - Rutenberg in electricity; Novomeisky in chemicals and Pollak in cement. Many of these natural entrepreneurs directed their efforts to the public sector, which provided a wider field for their activities. Some of the greatest personalities of this group were Pinchas Sapir (the Minister of Industries and later Minister of Finance), Levi Eshkol (the “tsar” of land settlement, later Minister of Finance and Prime Minister), Simcha Blass in developing water resources; Shaul Avigor in “illegal” immigration; Chaim Gavti in agriculture, Shimon Peres in the build up of the Israeli defense establishment, Ishi Lavi in communications, Proffesor Ernst David Bergman in defense scientific development; Meir Weis gal in research and development and far too many others to list here in banking, agricultural settlement, in agriculture, higher education, and almost in every other field. Thanks to them, the economy was created and thanks to them, the country was built. Each field and its own obsessed and dedicated entrepreneur.
What started as a necessity before the creation of the State and before the newly elected Government could establish correct methods and regulations, was absorbed in the collective genes of the nation, and was passed on to the new born State.
In spite of all the disadvantages of this ‘method’ that resulted in lack of coordination, and various arguments over who was responsible for what, chaos, and many other problems, this “method” did encourage initiative and the taking of responsibility, and it led to very tangible results.
The efforts to obtain international oil exploration concessions, especially in developing countries, were always an area that inspired great interest and curiosity. It is a world of international adventurers, full of colorful personalities, secret deals, meetings with foreign rulers, intrigue, ingenious tactics and strong competition for winning the concession.
The book describes Israel’s efforts in this difficult world, although its author is nothing like our stereotypical image of a swashbuckling wheeler-dealer. Zvi Alexander is a modest man, and the last person you would associate with this secret, manipulative world. However, he is one of those obsessed individuals. In his autobiography, “Oil,” he describes the first years of oil exploration in Israel, from the 50’s through the 70’s. Exploration, we said, but sadly no production.
Alexander, who was appointed as the Managing Director of the Government owned Israel National Oil Company, began acting on his own initiative (as a one man army), with almost no support from his superiors, in fact contrary to their wishes, with no real budget. He commenced his efforts to obtain oil exploration concessions in Africa, the North Sea, and other countries. He shares his experiences in great detail, and allows the reader a rare view not only into the world of quest for oil concessions, but also into the way the Government operated and how decisions were made in Israel’s early years.
The 60’s were the time when African countries began to become independent. Adventurers from all over the world flocked into Africa, including those seeking oil concessions. Alexander, in his attempts to obtain oil concessions and his efforts to raise money for oil exploration, met a fascinating group of individuals including political leaders in Gabon and Ghana, and Nigerian chieftains. He also worked with Howard Marshall II (who later became Ann Nicole Smith’s husband). He met with John King, Bernie Cornfield of IOS fame, and Mark Rich, all familiar names who were involved in famous financial scandals. In addition to oil concessions, Alexander also obtained rights for minerals exploration in Ethiopia and for diamonds in South Africa. Amongst his other adventures, he found himself doing business with Jack Biton, ostensibly a Jewish-Egyptian businessman who immigrated to Israel and opened a travel agency, but was later revealed to be an Egyptian spy.
Since he never received any real government budget to develop his oil concessions, he invented creative methods of funding his projects; enlisting oil industry partners to participate in his exploration efforts and provide the necessary funds. He knocked on the doors of various investment bankers including Jewish bankers, and had to fight and overcome the Arab boycott which had a very strong influence on the banking community.
But even when he succeeded in obtaining a significant interest in a North Sea oil concession, an area that later became one of the world’s most important oil sources, the Israeli Government was not prepared to commit itself to making the necessary investments in developing the North Sea license and the rights were consequently sold.
Like other “all or nothing” industries, such as movies, theater, music, restaurants, and even start-up companies, for every great success there are also very many failures. Those failures usually occur far away from the spotlight. In order to succeed in these industries, the person involved has to be fully dedicated and believe wholeheartedly in his particular activity, not only in the glory and the successes. He has to pay close attention to detail, while keeping his sights firmly fixed on the goal, and he must develop a thick skin to never give up despite the failures and the hardship.
The book faithfully illustrates this dedication. Alexander spares us no details and describes all the difficulties and disappointments he faced on his long and arduous journey. He even dedicated his book to those who know that in oil exploration, as in other endeavors, there is “5% of inspiration and 95% is damn hard work”. These values, were no doubt inherited by the author’s children from their father. Kobi and Shaula (whose activities are also mentioned in the book,) fought hard to build and develop their excellent hi-tech companies, Comverse and Smarts. Smarts was recently sold for approximately 260 million dollars.
I found the book fascinating, and at times entertaining, even if the author did not intend it that way. The various business adventures in which he found himself, and from which he generally escaped unhurt, and the Government’s constant refusal to take any opportunity that came their way, cannot but raise a familiar smile on the reader’s face. Zvi Alexander paints a personal perspective of public figures from the first three decades of Israel’s existence, and like any autobiography from that period, the reader remains in awe of the impossible way in which the State was built…and yet, unbelievably, it was…
Alexander earned the respect of then-Minister of Finance Pinchas Sapir for his role in developing Israel's oil exploration projects...he persuaded foreign companies to sell oil to Israel at a time when the Arab boycott nearly choked the economy...some chapters of his book read like a travelogue; others like a detective story. They are peppered with the rich and famous with whom he dealt, such as Mark Rich, the Rothschilds and the Bronfmans, as well as with the infamous, including Egyptian spies. - The Jerusalem Post, Diana Lerner 17 December 2004
Follow Alexander in his travels with the backdrop of an ever changing Israel, as he takes a penniless government owned company with unexplored oil concessions and transforms it into the empire that places Israel on the map in oil money making history. - Miami Entertainment News & Views 20 December 2004
'For most of his life, Zvi Alexander, a man with the guts of a gambler, was engaged in that most characteristic of Israeli pursuits: creating facts on the ground. Except in his case, the facts were holes dug deep under the ground, where, he wagered, bubbling reserves of oil might lie. In this sense he was a kind of pioneer, bursting socialist Israeli taboos and laying the groundwork for the venture capitalists and high-tech sector that flourished in 1990s Israel.' - The Forward July 2005
'Zvi Alexander, one of a small group of investors who established the oil industry in Israel, was the first businessman to bring to Israel non-Jewish oilmen from the US - who, together with Israel's National Oil Company under his management, funded and executed oil drilling in Israel.' - The Jerusalem Post July 2005
Reader Reviews: Zvi Alexander tells the unique story of a small group of dedicated men who helped overcome the Arab boycott by working to secure vital oil supplies to the Jewish state and develop oil exploration in Israel and in other countries. Alexander performs a valuable service of unveiling an important but little known chapter in Israel's struggle for survival and independence.
- Binyamin Netanyahu Minister of Finance Former Prime Minister of Israel
I am proud to know Zvi Alexander.
Zvi Alexander's determination, creativity, intuition and ceaseless energy are clearly evident in this descriptive and intense story that covers several decades. If one cares for Israel this is a must read!
From his accomplishments in overcoming the Arab boycott, fighting bad press and his personal explorations around the world to secure energy supplies for Israel, I could feel the excitement, disappointments and resentments as if I went through the experiences myself.
I came to know Zvi Alexander from my friendship with his son and although we are not as close, after reading this book I can see so much of him in his son. This is a story about 'never giving up', a story about resolve in the face of countless obstacles, a man determined to succeed for Israel!
The backbone of this book is a very personal account of many years spent in the oil business. It contains a wealth of amusing anecdotal material...Perhaps of most interest are the passages which cover Zvi Alexander's efforts to ensure security of oil supply in the face of the Arab Oil boycott...By the early 1960s, Alexander, then Deputy Managing Director of Lapidoth, was given the unexpected opportunity to put his ideas into practice...
-Barney Smith Oilbarrel.com April 2005
Moshe Aumann’s carefully researched Conflict & Connection: The Jewish-Christian-Israel Triangle is essential reading for anyone interested in the uneasy relationship that persists between Jews and Christians in today’s troubled times. It faces, head-on, the horrific role Christianity has played in the persecution of Jews over two millennia. It also reports the gradual progress made by numerous Christian groups-beginning with the Roman Catholic Church-as they have taken responsibility publicly, often in published documents (which appear in the book’s appendix), for the wrong-headed theology that had led to innumerable pogroms, massacres and finally the Shoah, and the consequent loss of millions of Jewish lives.
Aumann calls for the communication of this new perspective among grass-roots believers, both Christian and Jewish, who can, should and must find the courage to stand together on Common Ground as they face common enemies, common dangers, and an uncertain future. This is an exciting, encouraging and motivating book for all who would serve as peacemakers and bridge-builders.