Azerbaijan State Oil Firm (SOCAR) is ready to extend its involvement in Israel’s power business. Sources have knowledgeable “Globes” that SOCAR, because the operator in a consortium with British Petroleum (BP) and Yitzhak Tshuva’s NewMed Power (TASE: NWMD) to seek for gasoline in Block I within the northwest of Israel’s financial waters, will signal a piece plan with Israel’s Ministry of Power and Infrastructure in two weeks.
One of many main gamers behind SOCAR’s growth of actions in Israel is NewMed Power CEO Yossi Abu, whose efforts will bear fruit within the upcoming signing ceremony, which might be attended by a senior Azerbaijan authorities determine.
SOCAR’s newest transfer comes after Israeli businessman Aaron Frenkel’s large deal earlier this 12 months through which he agreed to promote half of his 10% stake within the Tamar gasoline discipline to the Azerbaijani power firm.
Azerbaijan sees the signing of the work program for the I block as a strategic transfer. This might be SOCAR’s first drilling operations exterior of Azerbaijan. The transfer was alleged to have been applied sooner, however was postponed as a result of warfare and the following unstable regional safety state of affairs.
In line with the phrases of the tender which was awarded in 2023, the consortium should submit a plan by October 2026 that features drilling in a minimum of one of many licenses within the block and a further work plan, which might be permitted by Israel’s Petroleum Commissioner. After executing a minimum of one drilling and assembly the work plan goals, the businesses will be capable of lengthen their actions for an additional two years.
A major participant for Israel and Turkey
SOCAR’s progress in gasoline exploration in Israel’s financial waters has, amongst different issues, dramatic geopolitical implications for the area. SOCAR is a vital power provider for Turkey and Israel. In Turkey, the corporate is the biggest overseas investor, having invested $18.5 billion within the final 17 years, and SOCAR’s subsidiary within the nation employs greater than 10,000 folks.
Azerbaijan can also be a major power provider for Israel. Oil exports generated a complete income of $14.4 billion for Baku in 2024, with Israel its sixth largest market. Regardless of the Turkish commerce embargo on Israel, the Erdogan administration selected to not halt the availability of Azerbaijani oil to Haifa, though passes by way of his nation. The rationale: Ankara’s power dependence on SOCAR and the necessity to not disrupt relations with Azerbaijan.
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As well as, relations between Israel and Azerbaijan are very shut. Azerbaijan was the second largest buyer of Israeli protection industries between 2018 and 2022 (over 9% of all Israeli protection exports). The connection between the international locations can also be based mostly on working collectively in opposition to the main risk from Iran, Azerbaijan’s southern neighbor.
Azerbaijan and Iran do preserve official diplomatic relations, however the two international locations typically criticize one another publicly – whereas Iran is making an attempt to behave on Azerbaijani territory. Two months in the past, for instance, Azerbaijan revealed that it had thwarted an Iranian try and hurt one of many leaders of the Jewish neighborhood on its territory. In January 2023, an assault was carried out on the Azerbaijani embassy in Tehran. Iran additionally accuses Azerbaijan of permitting, it claims, Israel’s Mossad to function from its territory. All this and different common recriminations between the international locations.
Amid these tensions, final month, the Azerbaijani president’s assistant for worldwide relations, Hikmet Hajiyev, met with Israel’s Prime Minister Benjamin Netanyahu final month within the Azerbaijani embassy in Tel Aviv to reportedly focus on “regional developments.” The principle regional developments the 2 spoke about have been the need to calm and mediate with Turkey on developments in Syria. Only a week later, an affiliate of the Azerbaijani president landed in Ankara, the place he met along with his pal, the pinnacle of the Nationwide Communications Directorate, Fahrettin Altun, one of many politicians closest to Erdogan, with the Azerbaijani embassy in Ankara reporting that the 2 mentioned “regional and international” points.
This isn’t the one geopolitical significance of the define settlement between Azerbaijan and the Israeli Ministry of Power. Block I, the place SOCAR will function, is situated on Israel’s maritime borders with Lebanon and Cyprus, whereas Turkey doesn’t acknowledge the boundaries of financial waters as established by worldwide regulation. Reasonably, Ankara is the one nation that acknowledges the Turkish Republic of Northern Cyprus (KKTC) and subsequently believes that it deserves financial waters. With the growth of Azerbaijani SOCAR’s actions within the area, it is extremely troublesome to see a state of affairs through which the Turks would specific opposition and attempt to thwart the transfer.
Potential for regional cooperation and the Syrian connection
One other consideration for SOCAR in coming into the gasoline exploration consortium with NewMed and BP in Block I is its strategic location for Azerbaijan. Amongst different issues, Azerbaijan seeks to seek out and transport gasoline to Mersin in southeastern Turkey and from there to European international locations through a pipeline that already exists and is lively in Turkey itself, thereby strengthening its energy.
As well as, by increasing its power actions, Azerbaijan might have bigger regional plans to attach a number of international locations with gasoline pipelines. Of the ten.09 BCM produced from the Tamar reservoir in 2024, about 34% was offered to Jordan, amongst others, and of the 11.33 BCM produced from Leviathan about 81.4% was directed for export. The Hashemite Kingdom is crossed from south to north by the Fajr gasoline pipeline, which connects to Syria so far as Homs, and from there branches off to Tripoli in Lebanon and Banias in western Syria. A senior power business official informed “Globes” that there’s potential for establishing a undertaking that will join the international locations through gasoline pipelines, at a value that might attain $200 million.
Within the power business typically and gasoline specifically, this isn’t a big sum, and positively not unreasonable. Such a undertaking may benefit all events concerned: Israel, which might earn better earnings from gasoline and Turkey’s financial dependence on it; Jordan would earn royalties from transport throughout its territory; and Syria, which solely lately handled the autumn of the outdated Assad regime and the institution of a brand new regime that’s making an attempt to get nearer to the West, would be capable of each use the imported gasoline to its benefit and rebuild relations with Israel.
Revealed by Globes, Israel enterprise information – en.globes.co.il – on March 7, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
