Azerbaijan to enter Israeli natural gas market

Azerbaijan State Oil Company (SOCAR) is acquiring a 10 percent stake in the Tamar natural gas reservoir off the country’s Mediterranean coast from Israeli businessman Aaron Frenkel.

Financial details of the deal were not disclosed. Azerbaijan’s state oil company SOCAR bought the stake from Union Energy, which is controlled by Frenkel. Back in 2022, Frenkel purchased an 11% stake in the Tamar gas field from Abu Dhabi’s Mubadala Petroleum, for about $520 million.

Discovered in 2009, the Tamar site saw its natural gas start to flow in 2013. Israel’s second-largest reservoir, located about 90 kilometers west of Haifa in the Mediterranean Sea, holds some 10 trillion cubic feet (tcf) of natural gas.

SOCAR said the deal is part of a plan to “acquire stakes in strategic assets in foreign countries… to expand production footprint.”

US energy giant Chevron operates and holds a 25% stake in the Tamar gas field. Other partners in the Israeli gas reservoir include Isramco, Tamar Investment 2, Tamar Petroleum, and Dor Gas.

This is not the first attempt by SOCAR to enter the Israeli natural gas market. In 2023, SOCAR joined a consortium including British multinational oil and gas firm BP and NewMed Energy to bid for licenses to explore and discover offshore natural gas fields in areas adjacent to Israel’s Leviathan field, one of the world’s largest deep-water gas discoveries.

The Republic of Azerbaijan’s alliance with Israel is a complicated one due to it sitting on Iran’s border, the same geography that makes it an enticing strategic partner for Jerusalem. The relationship has in recent years flourished in the wake of Israeli support for Azerbaijan during its conflict with Armenia.

Israel is one of Azerbaijan’s leading arms suppliers. Azerbaijan’s most important contribution to Israeli national security is oil.