New Decision by the Directors-General Committee: Dramatic Reduction in Salary Costs for Foreign Experts in the Onshore Oil and Gas Drilling Sector
On March 27, 2025, a groundbreaking decision was made by the Directors-General Committee, chaired by the Director-General of the Prime Minister’s Office. The decision marks a significant regulatory shift in the employment model for foreign workers in Israel’s onshore oil and gas drilling industry.
The resolution, initiated following a request by the Ministry of Energy and led through an extensive inter-ministerial process, allows—for the first time—the employment of foreign experts in this field under the “Unique Technology and Mechanization Work” procedure. This circumvents the limitations of the “Foreign Experts Procedure,” which mandates a minimum salary of double the national average wage for foreign experts.
What has changed?
Before the decision:
- Employing a foreign expert in this sector required a minimum monthly salary of ₪26,306 (double the national average wage). In practice, salaries were much higher—approximately ₪49,982 per month, including overtime and other additions, for 24 workdays or more.
- It was not possible to employ a foreign expert for more than 90 days at a reduced salary, and any extension beyond 90 days required a cumbersome administrative process.
After the decision:
- Foreign experts may now be employed under the “Unique Technology and Mechanization” route, at minimum wage.
- There is no longer a restriction on the length of employment, provided the work permit is valid.
- The requirement to employ at least 50% Israeli workers on the project has been canceled.
Field Data: According to the Ministry of Energy, the cost of employing a basic worker in onshore drilling currently stands at approximately ₪49,982 per month (for 24 workdays), a figure far exceeding international norms. Globally, monthly wages for geologists and engineers in the field typically range between €2,500 and €6,000—equivalent to ₪10,000–₪25,000 per month.
Implications for Employers:
Let’s consider a company needing 30 foreign experts for an annual drilling project. Under the previous employment terms, the annual salary cost per worker was:
₪49,982 × 12 months = ₪599,784 per worker per year
₪599,784 × 30 workers = ₪17,993,520 per year
Following the Directors-General decision, companies can now employ foreign experts under the “Unique Technology and Mechanization” route and pay minimum wage according to Israeli law—currently ₪6,247 per month:
₪6,247 × 12 months = ₪74,964 per worker per year
₪74,964 × 30 workers = ₪2,248,920 per year
Estimated savings:
₪15,744,600 per year in wage costs—for 30 workers.
In addition to the dramatic cost reduction, this change also provides regulatory relief, including:
- Elimination of the 50% Israeli workforce requirement per project
- Removal of the 90-day employment limitation
- Significant simplification of the application process
Conclusion:
This decision removes major employment barriers, aligns Israel with international employment models, and delivers a real breakthrough for companies operating in the onshore oil and gas exploration sector. It substantially reduces labor costs and opens the door to revitalizing a sector that has been neglected in recent decades due to regulatory constraints.
We take this opportunity to commend the Ministry of Energy and Infrastructure for its leadership in promoting this reform and for the professional, determined efforts required to remove obstacles and deliver a realistic and practical solution that empowers the industry to move forward.
