Delek Drilling Sells Tamar Reservoir Shares in Billion Dollar Agreement With the UAE

Earlier this year, Israel and the United Arab Emirates signed a historic peace deal that ultimately kick started a wave of diplomatic ties between the Arab world and Israel. Since the signing of this deal, formally known as the Abraham Accords, Israel and the United Arab Emirates have established not only diplomatic ties, but economic, and cultural ties as well.

Delek Drilling, an Israeli owned gas and energy company has recently struck an MOU (memorandum of understanding) with Mubadala Petroleum, an international O&G exploration and production company owned by the Abu Dhabi government. Yitzhak Tshuva, owner of Delek Drilling has agreed to sell his 22% stake in the Tamar oil reservoir for a staggering 1.1 billion USD. As a part of this deal, which has been approved by the government, the Knesset, as well as the Israeli high courts, Delek Drilling is required to hand over its share to Mubadala Petroleum by the end of 2021.

In light of the deal, the Israeli Minister of Energy Yuli Steinitz expressed to Globes.il “The agreement for the sale of Delek’s holding in the Tamar natural gas reservoir to a company form Abu Dhabi represents further proof of success in implementing the gas plan that I initiated and fought to pass several years ago. The gas monopoly has been broken up, and major international companies are coming in and expressing confidence in our gas market. Now, after the signing of the Abraham Accords, a company from an Arab country is also investing in the Israeli gas market. I believe that this is the start of cooperation between the two countries in energy and other economic and diplomatic areas, to the benefit of their citizens.”

Assuming the deal goes through, it will mark the largest commercial agreement ever established between the two countries following the signing of the Abraham Accords. The billion dollar deal between Delek Drilling and Mubadala Petroleum marks an exciting chapter within Israel-UAE relations, and has the potential to strengthen regional collaboration in regards to natural gas. CEO of Delek Drilling Yossi Abu recently told S&P Global that “this transaction has the potential to be another major development in our ongoing vision for gas commercial strategic alignment in the Middle East, whereby gas becomes a source of collaboration in the region.”