MIDDLE EAST RECORD
MIDDLE EAST RECORD
In May 1979, I chose to leave the comfort of a major oil company to join the charismatic Joe Reid, CEO of Superior Oil, and become the Chief Financial Officer of the largest U.S. independent oil and gas company. It was one hell of a good ride. No one at Exxon could imagine that I would leave in the first place and then do all the things without restraint required to bring Superior into the modern world. Accordingly, I took the liberty of recruiting the best and brightest of Exxon to join me. Joe had done the same thing with Mobil Oil to fill the ranks with the best technical organization available. Mobil ultimately sued Superior but lost the litigation in the free-wheeling Texas oil town of Houston.
As there were few boundaries to Superior Oil, Superior discovered oil in the Gulf of Suez which was formerly Egyptian territory but fell into Israelis hands following an invasion to control the Sinai Peninsula. On March 26, 1979, President Jimmy Carter negotiated a peace accord between Anwar Sadat, President of Egypt, and Menachem Begin, Prime Minister of Israel, shown below at the signing ceremony.
By coincidence, Superior lit the flare on the drilling rig, as shown below, to test the discovery and kindly offer a visible path for Begin to find his way home to Tel Aviv. Therefore, we oil folks had nine months to put the discovery on production before the ownership passed from Israeli hands to those of Egypt. Accordingly, it was all hands-on deck to produce and generate funds for the Government of Israel and capture our share of the results. As we already had a position on- shore Egypt, we chose an unrelated handle of “Neptune” for our subsidiary in the Israeli caper.
The map below adds some clarity to the location of Israel relative to the Sinai Peninsula and Egypt. You will recognize the location of the other more current troubles facing Israel today in Gaza. Moreover, there are plenty more nearby unpleasant neighbors such as Iran to stir the cauldron of hatred created by unfathomable religious differences that have festered since the beginning of time.
Joe asked that I take the audit partner from Arthur Andersen, which at the time was the largest worldwide accounting firm until it stubbed its toe with the accounting machinations of their client Enron, and go to Tel Aviv, Israel to negotiate our departure from Israel. The partner and I were good friends though at times he may have said that I clearly made unreasonable demands being the client. However, we were in uncharted waters in Israel. I loved Tel Aviv and was enchanted with the young lady soldiers in uniform carrying Uzi machine guns over their shoulders who hopped on and off the shuttles that transported everyone around the city.
After a miserable week of accounting issues with a horde of bearded Israeli accountants, we decided to devote our final morning to a trip to Jerusalem for a bit of culture. The night before, I opened an envelope that the Superior manager handed me to take to Houston to “expedite its delivery.” I learned a long time before then to know what you carry around. I was somewhat set back when I noticed that the inner envelope was addressed to The Egyptian Military Commander of the Sinai Peninsula and contained aerial photographs which I thought was rather odd, but I did not think much of it until the following afternoon.
As part of our tourist trip, we walked on the Via Dolorosa path that Jesus carried the crucifixion cross through Jerusalem. At one point, the original stones where Jesus’ tread were exposed, and the custom was to kiss the stones shown below. I asked the partner to kiss them, and he refused which I thought was a lack of customer service, but I let it go as he continually argued that it was not sanitary.
The security vulnerabilities of Israel became painfully apparent when we were questioned at the airport on our departure by the most proficient personnel in the world. The line of questioning went like this: Why did you enter Tel Aviv on an economy flight to depart first class (first was not available on the way in), where did you go to today (Jerusalem was not a preferred response), were your belongings left unattended (yes), did anyone give you anything to take (I purposely failed to mention the letter to the Egyptian Military Commander of the Sinai), and finally, my finest hour arrived, what was the nature of your business in Israel? I then responded we were Neptune Oil and had discovered oil in the Gulf of Suez to the economic benefit of Israel and now had to relinquish it to Egypt considering the peace accord. Suddenly, the atmosphere improved though I did receive a buffeting pat down from a full format woman security officer.
In any event, I have never been so relieved as to get through an airport security post. Once in neutral territory, we had a glass of champagne and were anxious to catch our plane to Rome where a raucous weekend had been planned. However, our world went upside down when Alitalia announced their flight to Rome had been cancelled. The audit partner was somewhat confused when I told him we were not going back out past security control and I would find us a flight going somewhere. I got us two tickets to Oslo, Norway and off we went. It was not until we were in open skies that I told him what the problem had been and his face turned white.
Over the years, I have had oil and gas operations in both Israel and Egypt which illustrates the depth of the original Paris Peace Accord. Nonetheless, at this juncture, the future of Gaza is tumultuous given outside interference by certain troublemakers. Further, Israel may have grown a bit complacent as they truly live in a dangerous neighborhood that few of us can comprehend.
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