Mubadala Investments set to acquire stake in Israeli gas field

Volterra Fietta Client Alert
10 June 2021

Abu Dhabi’s state-owned Mubadala Investment Company (“Mubadala”) is on track to acquire a USD 1.1 billion stake in the Tamar natural gas field (the “Tamar field”), located offshore Israel.

On 26 April Mubadala signed a memorandum of understanding with Israel’s Delek Drilling LP (“Delek”).  Delek originally aimed to sell its 22% stake in the Tamar field to Mubadala by the end of May.  Mubadala would pay up to USD 1 billion unconditionally and a further USD 100 million subject to a number of terms and goals being met.

Delek was requested by Israeli authorities to sell its stake in the Tamar field owing to its large market share.  Israel is aiming to enhance the competitiveness of its gas sector following its 2015 Gas Framework.  Delek still holds a 45.3% stake in the Leviathan natural gas field, the largest in Israel.

The Tamar field is located 90 kilometres west of Haifa and holds over 300 billion cubic metres of gas reserves.  It is operated by Chevron who holds a 25% stake.  The Tamar field began production in 2013 and it can produce 11 billion cubic metres of gas per year.

The sale would be the largest commercial operation between Israeli and Emirati parties since the 2020 Abraham Accords.  The Abraham Accords marked the normalisation of relations between the United Arab Emirates and Israel.