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The deal is believed to be the largest and most significant commercial agreement between Israel and the United Arab Emirates since the establishment of diplomatic relations.
By ZEV STUB
APRIL 26, 2021 18:11
The Tamar Rig
(photo credit: Courtesy)
Delek Drilling has signed a memorandum of understanding to sell its 22% share in the offshore Tamar natural-gas field to Abu Dhabi’s Mubdala Petroleum Company for $1.1 billion.
The deal is believed to be the largest and most significant commercial agreement between Israel and the United Arab Emirates since the establishment of diplomatic relations between the two countries last August.
Delek was required to sell all of its rights to the Tamar field by the end of 2021 as part of a government plan drafted in 2015 to regulate and decentralize the structure of the local natural-gas market. The deal includes $1b. paid upfront and $100 million to be paid upon the completion of certain conditions, Delek said in a press release.
A map of the Tamar field (courtesy)
Tamar, Israel’s largest natural-gas field, was discovered in 2009 and began production in 2013, beginning Israel’s era of energy independence. The reservoir, located about 90 km. west of Haifa at a water depth of about 1,700 meters, has proven and expected reserves of about 300 billion cubic meters (b.c.m.) of natural gas and 14 million barrels of condensate, as of the latest report published in January 2020.
The field has six partners, including Isramco (28.75%), Chevron, which also serves as an operator (25%), Delek Drilling (22%), Tamar Petroleum (16.75%), Dor (4%) and Everest (3.5%).
Gas from Tamar flows from six wells through two 140-km. pipes to the Tamar rig, where most of the gas treatment process is done. From there, the gas is delivered by pipeline to Ashdod, where it is converted to electricity for the Israeli market, with small quantities exported to Egypt and Jordan.
This gas has replaced coal as Israel’s primary electricity production resource and has played a significant role in reducing Israel’s carbon emissions over the past decade.
Following the sale, Delek Drilling will continue to hold 45.3% of Israel’s other main natural-gas field, Leviathan. Located 547 km. southwest of Tamar, it has proven and expected gas reserves of 649 b.c.m. and 41 million condensate barrels, with a production capacity of 1.2 billion cubic feet of gas per day and decades of expected production, Delek said.
In addition, Delek Drilling owns 30% of the Aphrodite reservoir located off the coast of Cyprus, with expected reserves of 3.5 trillion cubic feet of gas (about 100 b.c.m.).
Mubdala Petroleum is an international natural-gas exploration and production company that holds natural-gas assets in 10 countries, with a focus in the Middle East, North Africa, Russia and Southeast Asia. Founded in 2012, it is a wholly owned subsidiary of Mubdala Investments, which is owned by the Abu Dhabi government. The company already has operations in the area, with rights to two Egyptian gas reservoirs it acquired in 2018.
Delek had received numerous offers for the field, but it chose Mubdala due to a number of strategic and commercial considerations, the company said. The companies will work to finish due diligence and complete the deal in the coming weeks.
“The memorandum of understanding signed today is a major step on the way to the final completion of the gas framework, in accordance with all our commitments,” Delek Drilling CEO Yossi Abu said. “This memorandum of understanding meets all the criteria we set for ourselves: meeting the schedule of the gas plan, a valuable deal for Delek Drilling shareholders, strengthening the natural-gas economy in Israel and deepening regional cooperation.”
Energy Minister Dr. Yuval Steinitz said the agreement “is further proof of the success of the gas layout that I initiated and struggled to transfer several years ago. The gas monopoly has disintegrated, and large international companies are coming in and expressing their confidence in our gas economy.”
“Now, after signing the Abraham Accords, a company from an Arab country is also investing in Israel’s gas market,” he said. “I believe this is the beginning of cooperation between the countries in the field of energy and in other economic and political areas.”
www.jpost.com
By ZEV STUB
APRIL 26, 2021 18:11
The Tamar Rig
(photo credit: Courtesy)
Delek Drilling has signed a memorandum of understanding to sell its 22% share in the offshore Tamar natural-gas field to Abu Dhabi’s Mubdala Petroleum Company for $1.1 billion.
The deal is believed to be the largest and most significant commercial agreement between Israel and the United Arab Emirates since the establishment of diplomatic relations between the two countries last August.
Delek was required to sell all of its rights to the Tamar field by the end of 2021 as part of a government plan drafted in 2015 to regulate and decentralize the structure of the local natural-gas market. The deal includes $1b. paid upfront and $100 million to be paid upon the completion of certain conditions, Delek said in a press release.
Tamar, Israel’s largest natural-gas field, was discovered in 2009 and began production in 2013, beginning Israel’s era of energy independence. The reservoir, located about 90 km. west of Haifa at a water depth of about 1,700 meters, has proven and expected reserves of about 300 billion cubic meters (b.c.m.) of natural gas and 14 million barrels of condensate, as of the latest report published in January 2020.
The field has six partners, including Isramco (28.75%), Chevron, which also serves as an operator (25%), Delek Drilling (22%), Tamar Petroleum (16.75%), Dor (4%) and Everest (3.5%).
Gas from Tamar flows from six wells through two 140-km. pipes to the Tamar rig, where most of the gas treatment process is done. From there, the gas is delivered by pipeline to Ashdod, where it is converted to electricity for the Israeli market, with small quantities exported to Egypt and Jordan.
This gas has replaced coal as Israel’s primary electricity production resource and has played a significant role in reducing Israel’s carbon emissions over the past decade.
Following the sale, Delek Drilling will continue to hold 45.3% of Israel’s other main natural-gas field, Leviathan. Located 547 km. southwest of Tamar, it has proven and expected gas reserves of 649 b.c.m. and 41 million condensate barrels, with a production capacity of 1.2 billion cubic feet of gas per day and decades of expected production, Delek said.
In addition, Delek Drilling owns 30% of the Aphrodite reservoir located off the coast of Cyprus, with expected reserves of 3.5 trillion cubic feet of gas (about 100 b.c.m.).
Mubdala Petroleum is an international natural-gas exploration and production company that holds natural-gas assets in 10 countries, with a focus in the Middle East, North Africa, Russia and Southeast Asia. Founded in 2012, it is a wholly owned subsidiary of Mubdala Investments, which is owned by the Abu Dhabi government. The company already has operations in the area, with rights to two Egyptian gas reservoirs it acquired in 2018.
Delek had received numerous offers for the field, but it chose Mubdala due to a number of strategic and commercial considerations, the company said. The companies will work to finish due diligence and complete the deal in the coming weeks.
“The memorandum of understanding signed today is a major step on the way to the final completion of the gas framework, in accordance with all our commitments,” Delek Drilling CEO Yossi Abu said. “This memorandum of understanding meets all the criteria we set for ourselves: meeting the schedule of the gas plan, a valuable deal for Delek Drilling shareholders, strengthening the natural-gas economy in Israel and deepening regional cooperation.”
Energy Minister Dr. Yuval Steinitz said the agreement “is further proof of the success of the gas layout that I initiated and struggled to transfer several years ago. The gas monopoly has disintegrated, and large international companies are coming in and expressing their confidence in our gas economy.”
“Now, after signing the Abraham Accords, a company from an Arab country is also investing in Israel’s gas market,” he said. “I believe this is the beginning of cooperation between the countries in the field of energy and in other economic and political areas.”
Delek sells its share in Tamar gas field to Abu Dhabi for $1.1 billion
The deal is believed to be the largest and most significant commercial agreement between Israel and the United Arab Emirates since the establishment of diplomatic relations.
www.jpost.com
