$1.1 billion deal: Delek sells rights to Israeli gas field to UAE company

The Israeli energy partnership has signed an MOU to sell its 22 percent holding in the reservoir for $1.1 billion.

By JNS

Israeli energy partnership Delek Drilling announced on Monday that it has signed a non-binding memorandum of understanding (MOU) to sell its stake in the Tamar natural-gas field to Abu Dhabi’s Mubadala Petroleum for $1.1 billion.

Mubadala Petroleum, a government-owned oil and gas exploration and production company, was established in 2012 and operates in 10 nations. Its primary focus is in the Middle East, North Africa, Russia and Southeast Asia.

Delek Drilling CEO Yossi Abu called the development “a large step towards the final completion of the Gas Framework, in accordance with all our undertakings at the outset,” reported the Israeli business daily Globes.

The agreement also represented a “further, important stage in fulfilling the vision of strong regional cooperation,” he added.

Israel’s Gas Framework, comprising government decisions approved in 2015 and 2016 to encourage competition in the gas sector, obliges Delek Drilling to sell its 22 percent share in the reservoir by December 2021.

In response to Monday’s announcement, Israeli Energy Minister Yuval Steinitz said, “As I promised, [Israel’s] gas monopoly continues to disintegrate.”

“The agreement for the sale of Delek’s share in the Tamar natural-gas reservoir to a company from Abu Dhabi represents further proof of success in the implementation of the Gas Framework I initiated and fought to pass several years ago,” he added.

“Large international companies are entering and expressing their confidence in our gas market, and now, after the signing of the ‘Abraham [Accords],’ a company from an Arab country is also investing in Israel’s gas market. I believe this is the beginning of cooperation between the countries in the field of energy and in other economic and political fields for the welfare of the citizens,” he said.

After the sale of its rights in Tamar, Delek Drilling will continue to hold a 45.3 percent share in the Leviathan reservoir, alongside holdings in Ithaca Energy, which operates in the North Sea, and other assets, according to Globes.