In a significant step for Azerbaijan-Israel energy cooperation, Azerbaijan’s state oil company, SOCAR, officially signed a gas exploration agreement with Israel on March 17. The signing ceremony took place during a working visit of the Azerbaijan Minister of Energy to Israel, alongside the president of SOCAR.

The deal grants SOCAR, alongside a consortium with the UK-based energy giant BP and Israeli company NewMed Energy, the right to explore for natural gas in an area known as Zone I in the north of Israel’s exclusive economic zone in the Mediterranean Sea. SOCAR was designated the operator of Zone I and owns 33.34% of the partnership. 

SOCAR and the consortium initially bid on and won the exploration rights in October 2023 for a period of three years. However, the implementation of the project was postponed due to escalations in the Israel-Hamas conflict. 

Now that the deal has been officially signed, the consortium must submit a plan by October 2026 that includes drilling in at least one licensed area and an additional work program to assess the potential for natural gas discovery. According to the tender rules, following this period the license holders can request an extension for an additional two years, subject to approval from the oil commissioner and a commitment to drill in at least one licensed area. 

After conducting at least one drilling operation and the work program, SOCAR will have the opportunity to extend its license for another two years, up to a maximum of seven years. 

Israel Energy and Infrastructure Minister Eli Cohen praised the deal, stating, “The entry of SOCAR and BP is excellent news for the State of Israel. Natural gas is a strategic asset, which strengthens our economic and political position in the world in general and in the Middle East in particular.”  

The signing of this deal follows SOCAR’s recent purchase of a 10% stake in Israel’s Tamar gas field on January 31, further cementing Azerbaijan as a key partner in Israel’s energy development.

With growing collaboration between the two nations, the recent exploration agreement represents another step in securing regional energy security and strengthening economic ties.