Israeli firm in potential $1.1 billion Mediterranean gas field deal with UAE

Delek Drilling have hailed the potential deal as part of a 'strategic alignment in the Middle East'.

2 min read

26 April, 2021

Delek Drilling holds a 22 percent stake in the Tamar gas field [Getty]

An Israeli oil and gas firm has signed a non-binding agreement to sell its 22 percent stake in the Mediterranean Tamar gas field to an UAE state holding company, Reuters reported on Monday.

The potential deal could see Delek Drilling sell part of the Eastern Mediterranean field to Abu Dhabi's Mubadala Petroleum for $1.1 billion.

The Tamar gas field is one of Israel's key energy projects and can produce 11 billion cubic metres of gas each year.

Tamar, which began production in 2013, has estimated reserves of up to 238 billion cubic metres.

Delek CEO Yossi Abu hailed the two potential sale as part of a "strategic alignment in the Middle East, whereby natural gas becomes a source of collaboration in the region".

Delek said in its announcement that it aimed to complete the deal by the end of May but would require approval from the Israeli government.

Mubadala described the deal under discussion as "in line with our strategy of seeking high quality... investments that strengthen our gas-biased portfolio in line with our energy transition targets".

The final deal could be one of the most significant to be inked since Israel and the UAE normalised ties last year.

The UAE became the third Arab nation to normalise ties with Israel last year as part of a Trump administration push that also saw Bahrain, Sudan and Morocco forge relations.

Arab and Muslim-majority countries have historically refrained from economic and diplomatic ties with Israel out of solidarity with the Palestinians.

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