Azerbaijan’s state oil company SOCAR has finalized a joint venture (JV) with Israel’s Union Energy & Systems A Ltd. as it continues to grow its upstream offshore gas presence in the Israeli sector of the Eastern Mediterranean.
Malta's Competition and Consumer Affairs Authority (MCCAA) signed off in early April on the incorporation of Union Energy & Systems Operations Malta Ltd. which SOCAR and Union Energy will control jointly.
The JV leverages SOCAR's operational expertise in gas production and transport, MCCAA said in a press statement. Incorporation of the JV followed signing of a memorandum of understanding in March to initiate joint gas exploration in Israel’s exclusive economic zone.
SOCAR also trades liquefied natural gas (LNG) from its base in Malta.
Azerbaijan Also Active in Tamar, Leviathan
Union Energy & Systems A Ltd. is a Malta-registered company owned by Israeli entrepreneur Aaron Frenkel, who controls Union Energy Group and on 31 January agreed to sell SOCAR a 10% stake in Israel’s second-largest gas field—Chevron-operated Tamar with reserves estimated at 10 Tcf of natural gas.
Though financial details were not disclosed, The Times of Israel noted that Frenkel had paid about $520 million for an 11% interest in Tamar when he purchased half of Abu Dhabi’s Mubadala Petroleum’s stake in 2022.
Chevron holds a 25% operator interest in Tamar, which exports gas to Jordan. Mubadala holds 11%, SOCAR 10%, and the remaining shares are split between Israeli partners Isramco, Tamar Investment 2, Tamar Petroleum, and Dor Gas.
In 2023, SOCAR took on its first exploration activities outside of Azerbaijan when it joined a consortium including BP and NewMed Energy to bid for licenses to explore and discover in areas adjacent to Israel’s largest gas field, Leviathan, which is also Chevron operated.
Israel’s Ministry of Energy awarded six gas exploration licenses to the threesome in March 2025 in Zone I, a 1700-km2 area located in the northern part of Israel's economic waters, as part of Israel’s efforts to boost production.
SOCAR holds a 33.34% operator interest in the partnership and is the operator of Zone I, while NewMed Energy and BP have 33.33% each, the ministry said. The exploration project represents BP’s first foray into Israeli waters.
As of the end of 2023, Israel's total proven natural gas reserves stood at approximately 709 Bcm. In that year, the country produced over 25 Bcm of natural gas and exported more than 11 Bcm, acoording to the ministry.
Israel’s Energy Ministry said it will announce a fifth exploration bidding round during 2025.
