Although Oil exploration in Israel has not proven successful in the past (current output is less than 1,000 bbl/d), drilling is being stepped up. Israels Petroleum Commission has estimated that the country could contain 5 billion barrels of oil reserves, most likely located underneath Natural Gas reserves. Geologically, Israel appears to be connected to the oil-rich Paleozoic petroleum system stretching from Saudi Arabia through Iraq to Syria.
Overall, around 460 oil wells have been drilled in Israel since the 1940s, with little success. In late September 2000, a contract was signed between U.S.-based Ness Energy International and Lapidoth Israel Oil Prospectors Corp. to commence further work on the Har Sedom 1 Well.  In May 2004, Givat Olam reported that it may have found up to 980 million barrels of oil reserves at the Meged-4 well near Kfar Sava, north of Tel Aviv. However, the company expects only 20 percent of the new reserves to be extractable. In April 2005, Zion Oil & Gas, Inc., based in Dallas and Tel Aviv, began drilling at the Maanit-1 well, located approximately 37.5 miles north-northeast of Tel Aviv.
Israel has sizeable deposits of oil shale, perhaps 600 million tons recoverable, with average production of about 9,000 bbl/d. Most of Israels shale oil resources are located in the Rotem basin region of the northern Negev desert near the Dead Sea. Oil shale is sedimentary rock containing organic material from which liquid fuel may be extracted, at a rate of perhaps 15-17 gallons of oil per ton of shale.