Azerbaijan’s SOCAR Secures Israeli Gas Exploration Licenses, Expanding Market Presence

On Monday, Israel awarded gas exploration licenses to a consortium that includes Azerbaijan’s energy conglomerate SOCAR, bp, and Israel’s NewMed Energy for natural gas exploration in Israel’s Mediterranean waters.

The three companies jointly submitted a bid in 2023. However, the exploration was temporarily delayed due to the outbreak of war with Hamas on October 7, 2023. The recently granted licenses reactivate the process and mark SOCAR and bp’s entry into the Israeli gas market.

The awarded licenses cover Cluster I, a 1,700-square-kilometer area in the Mediterranean, at the northern part of Israel’s Exclusive Economic Zone near the Leviathan field. SOCAR, holding a 33.34% stake in the venture, will serve as the operator of the exploration consortium. The consortium plans to conduct seismic and geological surveys in the initial exploration phase, with drilling scheduled in the second phase based on survey results.

“Natural gas is a strategic asset that strengthens our economic and diplomatic standing worldwide, particularly in the Middle East. That’s why we are working to expand natural gas production for both the domestic market and exports, especially in these times,” The Israeli Times quoted Israel’s Energy Minister, Eli Cohen, as saying.

On Monday, Minister Cohen met with a delegation from Azerbaijan led by Economy Minister Mikayil Jabbarov. That same day, they attended the presentation ceremony for the exploration licenses for Cluster I near the Leviathan field.

The exploration license is valid for an initial period of three years. During this period of time, the license holders will perform exploratory work on the entire license areas. After drilling at least one well and carrying out the additional work plan, license holders can extend the license period in the cluster by two additional years, and up to a maximum of seven years.

The Eastern Mediterranean’s gas-rich offshore basin – shared by Israel, Egypt, Türkiye, Cyprus, Lebanon, and Syria – has been attracting global energy companies, particularly as Europe seeks alternatives to Russian gas supplies following the war in Ukraine.

Since the first commercial deliveries from the Leviathan field in 2020, Israel has contributed to regional energy exports, helping diversify Europe's energy sources. The Leviathan field is estimated to contain 22 trillion cubic feet of gas, or approximately 623 billion cubic meters.

SOCAR’s involvement in Israeli energy exploration aligns with its broader strategy of acquiring strategic overseas assets to expand production and exports, particularly to Europe via Türkiye. The agreement grants the Azerbaijani energy giant another foothold in key Israeli assets, following its purchase of a 10% stake in the Tamar gas field earlier this year.

On January 31, 2025, SOCAR finalized an agreement with Union Energy to acquire a 10% effective ownership stake in the Tamar field – one of Israel’s largest and most strategically significant offshore gas fields in the Mediterranean basin. The deal signaled SOCAR’s investment in upstream projects in the Mediterranean region.

Azerbaijan and Israel have been strengthening their energy cooperation in recent years, with Azerbaijan playing a key role in Israel’s energy security.

For over two decades, Azerbaijan has been a major supplier of crude oil to Israel. The Baku-Tbilisi-Ceyhan (BTC) pipeline is a crucial route for Azerbaijani oil exports, with a significant portion shipped to Israel, meeting approximately 40% of its domestic oil demand.