Azerbaijan’s SOCAR to buy Tamar stake from Aaron Frenkel

Up to date: Sunday, February 2, Tamar Petroleum reported to the TASE that Aaron Frenkel is promoting 48% of his holdings within the Tamar gasoline discipline to SOCAR.

Azerbaijan State Oil Firm (SOCAR) has agreed to purchase a ten% stake in Israeli offshore gasoline discipline Tamar from Aaron Frenkel, a supply near the matter has instructed “Globes.” This represents over half of the stake in Tamar held by Frenkel and one other main deal for the Israel businessman.

Frenkel’s 20% stake in Tamar contains 14.5% held instantly and the rest as a part of a 25% stake in Tamar Petroleum (TASE: TMRP), which holds 16.75% of the gasoline discipline. The sale of Tamar shares by Frenkel follows his sale final month of a 2% stake in Financial institution Leumi (TASE: LUMI) for an estimated acquire of greater than NIS 600 million.

State-owned SOCAR manages Azerbaijan’s oil and gasoline trade and the funding in Israel has main geopolitical implications and brings Israel and Azerbaijan even nearer collectively diplomatically.

SOCAR’s funding within the Tamar gasoline discipline, operated by vitality main Chevron, has, so far as is understood, acquired the US firm’s blessing. Subsequently, it’s also a part of President Trump’s coverage of strengthening financial stability within the Center East by means of strategic investments, particularly within the vitality sector. Chevron not solely owns a 25% stake in Tamar, however can also be its operator for all of the companions. This funding by SOCAR promotes financial ties between the US, Azerbaijan, and Israel, and can assist leverage strategic cooperation in quite a lot of fields.

Frenkel constructed his direct place within the gasoline discipline by means of an possibility transaction with Mubadala Petroleum, owned by the Abu Dhabi authorities, which he exercised in December 2022, in addition to from Harel Insurance coverage and Finance and the Israel Infrastructure Fund (on the finish of final September). He additionally purchased 25% of the shares of Tamar Petroleum, which controls 16.75% of the sector. Collectively together with his buy of Tamar Petroleum shares, Frenkel has invested NIS 3.4 billion within the Tamar gasoline discipline, primarily by means of financial institution financing.

In the newest deal, which Frenkel accomplished a number of months in the past,  he paid roughly $280 million (over NIS 1 billion) for 3.5% of the rights within the reservoir he bought from the Israel Infrastructure Fund, which gave the reservoir a worth of over $8 billion (NIS 28 billion on the time of the deal). This worth is nearly double the worth of the reservoir within the 2021 deal, during which Delek Drilling (now NewMed Vitality) offered 22% of the rights to Mubadala for $1.1 billion, primarily based on a worth of about $5 billion for the Tamar reservoir (NIS 15.8 billion).

Frenkel himself just lately instructed “Globes” concerning the funding in Tamar. He mentioned, “That is an funding that was created as a part of the response to the Abraham Accords. I entered into it because of the great relations I’ve in Abu Dhabi and the UAE. We sat there with senior folks on the high who mentioned: How can we flip the signed paper (the Abraham Accords) into one thing concrete? We knew that Yitzhak Tshuva (controlling proprietor of Delek Drilling) was obliged to promote the holdings within the Tamar reservoir by December 2022. So that they (Mubadala) purchased and gave me an possibility, however I used to be the one who initiated the matter.”

Mubadala acquired 22% of Tamar and gave Frankel an choice to promote him half of its holdings within the reservoir (11%). He went on to amass one other 3.5% stake, whereas on the similar time buying about 24.99% of Tamar Petroleum, which owns 16.75% of Tamar. “I’ve a direct and oblique stake of about 18.7% of Tamar,” he mentioned, “and since I’m one of many controlling shareholders of Tamar Petroleum, you may say that I affect 31.25% of the reservoir.”

The Tamar reservoir, positioned within the Mediterranean Sea 90 kilometers west of Haifa, was found in 2009 and manufacturing started in early 2013. The reservoir’s present manufacturing capability is 10.3 BCM per yr and its gasoline reserves are estimated at 291.5 BCM. The companions within the reservoir immediately, alongside Frankel and Tamar Petroleum, are Mubadala, Isramco, Chevron and Dor Fuel.

Printed by Globes, Israel enterprise information – en.globes.co.il – on February 1, 2025.

© Copyright of Globes Writer Itonut (1983) Ltd., 2025.