Delek Drilling has finalized a deal to sell its 22% stake in the east Mediterranean Tamar gas field to Abu Dhabi's Mubadala Petroleum for about $1 billion, the Israeli company said on Thursday.
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Delek said it is the biggest commercial deal to be signed between Israeli and Emirati groups since Israel and the United Arab Emirates normalized ties last year. A preliminary agreement was reached in April but it required government approval.
The Tamar field is one of Israel's primary energy sources and can produce 11 billion cubic meters of gas a year – enough to cover much of the Israeli market as well as exports to Egypt and Jordan.
Delek Drilling, a unit of conglomerate Delek Group, holds a 22% stake in the field, which is operated by Chevron.
Mubadala Petroleum, a unit of Abu Dhabi government-owned Mubadala Investment Company, said the acquisition "will complement Mubadala Petroleum's gas-based portfolio strategy in line with its energy transition goals".
Delek also holds a significant stake in the even larger Leviathan gas field nearby and is selling its Tamar holdings to comply with government moves to open the market to more competition.
"A huge deal with a company from the United Arab Emirates, alongside exporting gas to Eygpt and Jordan, are actions on the ground and exactly how to build a new Middle East," said Delek Drilling CEO Yossi Abu.
"This transaction marks a milestone in the alignment between Israel and the UAE following the Abraham Accords Peace Agreement signed between the two countries in 2020," said Abu.
"On completion, the deal will represent one of the largest transactions between an Israeli entity and an Arab entity, which shows how Israel's natural gas resources can be a source of collaboration between nations. This is yet another pivotal brick to the wall of friendship and collaboration Delek Drilling has been building in the region.
"Our focus right now in Delek Drilling is on the expansion of our mega Leviathan reservoir and on creating new markets in the region and beyond for our produced natural gas," he added.
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