Israel's recent economic success is indisputable. While much of the global economy was struggling to escape the 'great recession' in 2010, growth in the Jewish State climbed by four per cent, fuelled by a high-tech sector that represents an astonishing 40 per cent of exports.
But Israel has been viewed globally as something of a one-trick pony, dangerously dependent on one industry, which has been the main driver for the Tel Aviv Stock Exchange (TASE). That has now changed dramatically.
The TASE has gone into a speculative frenzy following the recent announcement that Israel has discovered around 500 billion cubic metres of gas in the giant offshore Leviathan gas field, only rivalled by some of the Gulf statelets.
In the past year, TASE has climbed by an astonishing 1,700 per cent, and the old jokes about Moses leading the Israelites into the only part of the Middle East which doesn't have energy, have been rendered redundant. So how justified is the hype over the find, which is said could transform Israel's energy prospects for generations to come? All the indications are that it is very justified and is being taken seriously by the US Geological Survey.
Indeed, American investors regard Israel's gas find as so significant that they have hired former President Bill Clinton to lobby against retrospective changes in Israel's energy taxes written in 1952 - when no one believed that there was anything but dry holes to be found.
The new gas find in Israel could supply the country’s gas needs for 100 years
Much of the attention on TASE has been focused on the shares of Israel-based company Ratio Oil Exploration. Two years ago, this start-up employed five people and was worth an estimated $500,000. Its market value has soared to a $1 billion. The company's main asset is a 15 per cent stake in Leviathan.
As followers of the world energy exploration industry will know, the market is littered with financial disappointments. In recent weeks for instance, several British explorers quoted on the AIM market in London, have gone into free fall after the supposed rich fields in the South Atlantic have come up dry.
But Leviathan, which is 135 kilometres off Israel's Northern Coast - and within its 'economic' territorial waters - looks to be different. Noble, which discovered the deposit, began its explorations last October. As an American-based company, governed by the strict reporting requirements of the Securities & Exchange Commission, it is required to be accurate in its assessments so as not to create a false market.
Latest drillings have confirmed initial findings that Israel's Levant Basin contains a 16 trillion cubic feet of gas - the Leviathan field is the largest section discovered in the region so far and the largest deep-water gas find anywhere in the world for a decade. To place this in context, it could supply Israel's gas needs for 100 years transforming the country's energy security.
However, national ownership is never straightforward. The UK, for instance, has had to divide the spoils of the North Sea with Norway. And recent finds way off the Western Isles have resulted in ownership claims from Iceland among others.
But whereas the UK is at peace with Norway and Iceland, Jerusalem has no such luxury.
Its Lebanese neighbours are seeking a share of the action. Tehran's Ambassador to Beirut claimed in November that three-quarters of the Leviathan field is actually in Lebanese territorial waters. The Lebanese Parliament found time to rush through laws in the hope that it too can start selling off exploration rights.
When it comes to money matters in Israel, gas is cash. As it gradually dawned on stock market operators that Noble and its Israeli partner Ratio really had a giant discovery on their hands, the speculators and spivs swung into action.
A series of shell and skeleton companies came rushing to the market, each claiming to be explorers, but many had nothing to do with energy at all.
The Israeli Securities Authority - the stock exchange regulator - has had to step in to try and control misleading reports of new energy finds.
In one case, the offices of Israel-based EZ Energy were raided last September after the shares shot up 150 per cent on alleged reports that it had a relationship with Ratio.
Chief executive of Ratio, Yigdal Landau and board chairman Ligad Rotlevy, have foresworn any further contact with would-be oil partners that could be misconstrued.
As well as creating work for the TASE and the securities authorities, the gas finds also have led to some quick rethinking in a Netanyahu government anxious to grab some of the Leviathan revenues.
When Israel's natural resources tax law was written in the 1950s, no one expected a major find and the country had some of the most generous royalty requirements of any country in the world.
Now the nation is seeking to retrospectively impose windfall taxes of 20 to 60 per cent on future profits, much to the chagrin the of US explorers. This in itself is surely an indication that there is substance behind Israel's gas bubble.
