SOCAR-led consortium gets license to explore gas reserves in Israel

Azerbaijan and Israel have signed an agreement to grant a consortium led by the State Oil Company of Azerbaijan (SOCAR) a license for gas exploration in Israel's exclusive economic zone (EEZ) in the Mediterranean Sea, Report informs via Reuters.

The consortium, which includes SOCAR, Israeli NewMed Energy, and BP, won a tender in October 2023 to obtain a license from the Israeli Ministry of Energy for exploration work in Zone I-6. SOCAR was selected as the project operator. The project was planned to be implemented earlier, but it was postponed due to the sharp escalation of the conflict between Israel and the Palestinian group Hamas.

By October 2026, the consortium must submit a plan that includes drilling on at least one of the licensed areas, as well as an additional work program that must be approved by the oil commissioner.

According to the tender rules, exploration licenses are issued for an initial three-year period. During this period, license holders must complete a mandatory work program to assess the potential for natural gas discovery in the allocated area. After this period, license holders may request an extension for another two years, subject to approval of an updated work program approved by the oil commissioner, and commitments to drill at least within one of the licenses.

After conducting at least one drilling operation and completing all elements of the work program, licenses in the group can be extended for another two years, up to a maximum term of seven years. Such an extension will be possible provided that by the end of the license period, a commitment to drill on each license area where it has not yet been conducted is presented.

Along with this project, SOCAR announced on January 31, 2025, that it had concluded a deal with Union Energy to acquire a 10% stake in the Tamar project, one of the largest offshore gas fields in the Mediterranean.

Located off the coast of Israel, the Tamar field is a key supplier of natural gas to the region, playing an important role in energy security and economic growth. The operator of the Tamar project is Chevron.