Aaron Frankel exercised the option to purchase 11% of the Tamar reservoir from the Government Investment Fund

Businessman Aaron Frankel exercised the option to purchase 11% of the Tamar reservoir from the Government Investment Fund of Abu Dhabi for $522 million through Union Energy. Frankel completed the purchase after the rest of the companies that own the Tamar reservoir announced that they intend to expand gas production from the project in favor of exporting gas to Europe through Egypt - a more profitable production channel for them compared to selling gas to customers in Israel.
About a year ago, Mubadala completed the purchase of 22% of the Tamar reservoir from New Med Energy (formerly Delek Kedihim controlled by Yitzhak Tshuva) for about one billion dollars. As part of the gas outline, it was mandatory to sell New Med Energy's stake in the Tamar reservoir to enable competition between the Tamar reservoir and the Leviathan reservoir, in which New Med Energy owns approximately 45%.
The purchase deal of 22% in the Tamar reservoir by Movdala was carried out through two subsidiaries, one of which had an option to sell its holdings in the reservoir to Frankel. The transaction will be financed through nine international and Israeli banks.
Earlier this month, the partner companies announced that they will expand gas production in the reservoir - so that more gas can be exported. For this purpose, the companies that own Tamar have announced that they will invest 673 million dollars in the project to expand gas production from the reservoir until 2025, and in the future will examine another expansion of the reservoir that will allow them to further increase the export of gas to Egypt - which is more profitable than selling gas to customers in Israel.
Unlike the Leviathan reservoir, the partners in Tamar sell most of the gas from the reservoir to Israel, so they benefit less from the surge in natural gas prices worldwide following the war waged by Russia in Ukraine. In the first three quarters of this year, all partners in the Tamar reservoir sold 6.98 billion cubic meters (BCM) of natural gas to the local market and another 0.95 BCM for export - mainly to Egypt. For comparison, in the same period the Leviathan reservoir sold 8.54 BCM of gas, and 65% of it was sold to customers in Egypt and Jordan.
Until now, the Tamar reservoir has been owned by Chevron (25%), which also operates it, Isramco (28.75%), Mobdala from Abu Dhabi (22%), Tamar Petroleum (16.75%), Dor Gas (4%) and Everest (3.5%). After the deal is completed, Mubadala and Frankel will hold equal shares of 11% in the pool.
The issue of expanding gas exports from Israel to other countries is heavily criticized, given the fear that in about a decade and a half there will not be enough gas left in the Israeli reservoirs to meet the needs of the local market. But despite the companies' announcement, the Ministry of Energy has not yet granted permission to expand production at Tamar for the benefit of exports.