UAE-based Mubadala Petroleum has signed a non-binding memorandum of understanding (MoU) to acquire Delek Drilling’s stake in the Tamar gas field offshore Israel.

The $1.1bn deal, if finalised, will be one of the largest commercial agreements to be signed after Israel and the UAE agreed to normalise bilateral ties last year.

Located around 90km west of Haifa, offshore Israel, the Tamar gas field was discovered in 2009 and production commenced four years later in 2013.

According to the last reserves report by NSAI, proved and probable reserves in the Tamar lease, after production of more than 61BCM, is around 300BCM of natural gas and 14 million barrels of condensate.

Delek Drilling holds a 22% stake in the field, which is operated by Chevron with a 25% interest.

Isramco (28.75%), Tamar Petroleum (16.75%), Dor Gas (4%) and Everest (3.5%) are the other stakeholders.

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By GlobalData

Delek Drilling CEO Yossi Abu said: “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. The development is not only a significant endorsement of the quality of the Tamar reservoir and the Levant basin but also a major support for the East Mediterranean natural gas sector.”

Delek is required to divest its stake in the Tamar field under a government framework that seeks to increase competition in the sector.

The company will continue to own a 45.3% stake in the Leviathan gas field following the completion of the Tamar field divestment.