Mubadala Petroleum Acquires Delek's 22% Stake in the Tamar Project
Mubadala Petroleum LLC, a wholly-owned subsidiary of Abu Dhabi’s state-owned investment company Mubadala Investment Company PJSC, has entered into a non-binding Memorandum of Understanding (MoU) with Israel’s Delek Group Ltd. to acquire a 22% non-operated interest in the Tamar gas project, offshore Israel, for a total consideration of US$1.1 billion, including certain contingent payments of approximately US$100 million.
Under the Natural Gas Framework approved by the Israeli government in August 2015, Delek Drilling is required to transfer all of its interests in the Tamar and Dalit leases, including its its shareholdings in Tamar Petroleum, by the end of 2021. The parties will work to finalize the definitive agreement no later than May 31st, 2021. Delek Drilling has undertaken not to enter into any agreement with any third party for the sale of the leases until such date. The MoU shall terminate on the earlier of the date of execution of the definitive agreement, or 90 days following the date of the MoU.
The assets acquired include a 22% interest in each of the Tamar (I/12) and Dalit (I/13) leases, as well as its rights in the joint operating agreement governing the leases, the Tamar offtake agreements and the related agreements between the partners in the leases. Chevron Corp. currently holds a 25% operated interest, with Delek Drilling holding 22%, Isramco Negev 2 LP holding 28.75%, Tamar Petroleum Ltd. holding 16.75%, Dor Gas Exploration Ltd. holding 4% and Everest Infrastructures LP holding the remaining 3.5%.
The Tamar project is comprised of the Tamar (I/12) and Dalit (I/13) leases covering a combined area of 250 sq. km in water depths of approximately 1700 m, located approximately 90 km west of Haifa, offshore Israel. Discovered in 2009, the Tamar (I/12) lease contains the Tamar field and the Tamar SW field, whereas the Dalit (I/13) lease contains the Dalit gas discovery. Production in the Tamar field started in 2013, with natural gas being extracted through five production wells. The gas produced from the field flows through two 140 km. pipelines to the primary and main processing facility on the Tamar platform, where most of the gas processing takes place. Natural gas is then transmitted through a pipeline to the onshore terminal in Ashdod, and into the Israeli market through the INGL national gas pipeline, with a proportion being exported on to Jordan and Egypt.
The Tamar and Tamar SW fields have proved (1P) reserves of approximately 1.7 trillion cubic feet equivalent (Tcfe), with proved + probable (2P) reserves of approximately 2.3 Tcfe, as of December 31th, 2020, net to the acquired 22% interest.
“This transaction has the potential to be another major development in our ongoing vision for natural gas commercial strategic alignment in the Middle East, whereby natural gas becomes a source of collaboration in the region. We are proud to have signed this MoU following the Abraham Accords Peace Agreement between Israel and the UAE,” commented Yossi Abu, CEO of Delek Drilling.
Abu Dhabi-based Mubadala Petroleum is engaged in upstream operations across the Middle East, North Africa, Russia and Southeast Asia, with a portfolio of interests that includes the Dolphin gas project in Qatar/UAE, enhanced oil recovery operations in Oman, the Zohr gas project in Egypt, the Gazpromneft-Vostok JV in Russia, and exploration, development and production activities in Thailand, Indonesia, Malaysia, and Vietnam.
Listed on the Tel Aviv Stock Exchange (TASE), Delek Drilling is primarily engaged in the exploration, development, production, and sale of hydrocarbons, with a primary focus on the Levant Basin of the Eastern Mediterranean. The company is also currently pursuing high-potential opportunities in the U.S. Gulf of Mexico and the UK North Sea.
The transaction is subject to Mubadala Petroleum’s undertakings to bear the existing royalties in respect of the Delek Drilling’s interest in the project, and the execution of a definitive agreement between the two parties.