Azerbaijan-Israel ink natural gas exploration deal

A partnership comprising the State Oil Company of the Azerbaijan (SOCAR), BP Plc, and Israel’s NewMed Energy has been granted licenses for natural gas exploration in Israel’s exclusive economic zone in the Mediterranean, as announced by Azerbaijani Economy Minister Mikayil Jabbarov on Monday.

In a social media post, Jabbarov shared insights from his official visit to Israel, accompanied by SOCAR President Rovshan Najaf. He attended the license presentation ceremony for Block “I” in Israel’s Exclusive Economic Zone (EEZ), highlighting the strategic benefits these licenses provide for strengthening SOCAR’s global presence and leveraging innovative exploration methods.

The Israeli Ministry of Energy and Infrastructure, led by Eli Cohen and Oil Commissioner Hen Bar-Yosef, awarded the consortium six exploration licenses under Israel’s fourth competitive natural gas tender. The ministry emphasized that these licenses aim to boost natural gas reserves for both the national economy and export purposes. Additionally, the ministry indicated that further licenses will be granted later, with a fifth tender expected within a year.

SOCAR to drill first time outside of Azerbaijan

This initiative marks SOCAR’s inaugural exploratory drilling project beyond Azerbaijan’s borders. Although initially planned for an earlier date, the project experienced delays due to the intensification of the Israel-Hamas conflict.

The consortium of SOCAR, NewMed, and BP had previously secured a license from Israel’s Ministry of Energy in October 2023, following a tender for operations in Zone I-6, with SOCAR named as the operator.

Exploration licenses are granted for an initial three-year term, during which the consortium must complete a required work program to assess the area’s gas potential. After this period, an extension of up to two years may be requested, provided the consortium submits an updated work program approved by the petroleum commissioner and commits to drilling at least once.

If the drilling commitments are met and the work program completed, the licenses can be extended for an additional two years, up to a maximum of seven years. This extension is contingent upon drilling commitments for any licensed block that has not yet been drilled by the license’s expiration.

In a related move, SOCAR also announced on January 31, 2025, its acquisition of a 10% equity stake in the Tamar project, one of the Mediterranean’s largest offshore gas fields. The Tamar field, located off Israel’s coast, is a critical supplier of natural gas in the region, significantly contributing to energy security and economic development. Chevron, the American energy giant, operates the Tamar project.