Azerbaijan’s SOCAR completes acquisition of 10% Tamar stake

Union Energy, controlled by Israeli businessman Aaron Frenkel, has completed the allocation of 48.3% of the shares it holds in the Tamar offshore gas field, to the State Oil Company of the Republic of Azerbaijan (SOCAR). The deal, which will give SOCAR a 10% stake in Tamar, is worth an estimated $1.25 billion.

The deal, revealed by “Globes” and signed six months ago by Union Energy and SOCAR, is now being completed after the receipt of regulatory approval by the Petroleum Council and Israel Competition Authority. As part of the deal, SOCAR will hold its 10% stake in Tamar through a 48.3% holding in Union Energy and 3% of Tamar Petroleum (TASE: TMRP), an investment company in which SOCAR has acquired roughly 17.9% of Frenkel’s holding, in which prior to the sale he held a 24.99% stake. SOCAR joins the other partners in Tamar, which include the US energy major and field operator Chevron (25%) and the Abu Dhabi state fund Mubadala (11%).

The deal brings Azerbaijan and Israel closer together

The Tamar gas field, which is 90 kilometers west of Haifa in the Mediterranean, was discovered in 2009 and production began in 2013. The reservoir’s current production capacity is 10.3 billion cubic meters (BCM) annually and its gas reserves are estimated at 291.5 BCM. The partners in the reservoir, along with Frankel, Tamar Petroleum, Mubadala and Chevron, are Isramco and Dor Gas. SOCAR is a state-owned energy company that manages Azerbaijan’s oil and gas industry based in the country’s capital, Baku. The move has a geopolitical dimension that effectively brings Azerbaijan and Israel closer together.

Frenkel built his direct position in the gas reservoir through an option deal with Mubadala Petroleum, which he exercised in December 2022, as well as by purchasing a stake from the Harel insurance company and Israel Infrastructure Fund (IIF) in September last year. Together with the purchase of the shares in Tamar Petroleum, the cost of Frankel’s investment in the reservoir was NIS 3.4 billion – an investment made mainly with bank financing.

In the most recent deal that Frankel undertook, he paid about $280 million (over NIS 1 billion) a few months ago for 3.5% of the rights in the reservoir that he purchased from IIF, which gave the reservoir a value of over $8 billion (about NIS 28 billion at the time of the deal). This was a relatively small and unusual deal regarding the reservoir; as this value is almost double the value of the reservoir in the 2021 deal, in which Delek Drilling (now NewMed Energy) sold 22% of the rights to Mubadala for $1.1 billion, based on a value of about $5 billion for the Tamar reservoir (NIS 15.8 billion).

Frenkel himself recently told “Globes” about the investment in Tamar. He said, “This is an investment that was created as part of the response to the Abraham Accords. I entered into it as a result of the good relations I have in Abu Dhabi and the UAE. We sat there with senior people at the top who said: How do we turn the signing on paper (in the Abraham Accords) into something concrete? We knew that Yitzhak Tshuva (controlling owner of Delek Drilling) was obliged to sell holdings in the Tamar reservoir by December 2022. So they (Mubadala) bought in and gave me an option, but I was the one who initiated the interest.”

Mubadala bought 22% of Tamar and offered Frenkel an option to buy half its holding in the field (11%). He went on to purchase another 3.5% stake, and at the same time purchased about 24.99% of Tamar Petroleum, which owns 16.75% of Tamar. “I directly and indirectly own a stake of about 18.7% of Tamar,” he said, “and since I am one of the controlling owners of Tamar Petroleum, you could say that I influence 31.25% of the reservoir.”

Published by Globes, Israel business news – en.globes.co.il – on June 25, 2025.

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