The Abraham Accords Peace Agreement, brokered by President Trump in September 2020, is opening new avenues for Abu Dhabi sovereign wealth fund Mubadala to invest in Israel.
Mubadala has announced plans to buy a 22% stake in Israel’s Tamar offshore field for up to US$1.1 billion, marking the biggest business deal between the two nations since the normalization of relations.
The Emirati investor plans to purchase Delek Drilling’s share, proving Israeli Prime Minister Benjamin Netanyahu’s claim that the diplomatic agreement would lead to an influx of billions of dollars of Arab investment into the country.
Mediterranean gas resources emerged as strategic assets with the Tamar reservoir and the Levant basin playing an important role in the development of the sector. Tamar is Israel’s second biggest field after Leviathan and supplies gas to Israel, Jordan and Egypt.
Gas production from the offshore Tamar field started in 2013, with an estimated peak capacity of more than one billion cubic feet per day. The field is operated by Chevron and Israel aims to build a subsea pipeline from Tamar to Egypt for the production of Europe-bound LNG.
Tamar is strategically important for Israel as it has enabled the country to switch its power generation to national gas and reduced dependence on oil and coal.
Mubadala has already invested in Israel via its renewables arm, Masdar. In January, Masdar and Israel's EDF Renewables signed a strategic cooperation agreement to invest in the development of renewable energy projects in Israel. As part of the agreement, Masdar is the strategic partner of EDF Renewables Israel, a subsidiary of the French utility giant EDF, which already operates 18 solar energy projects in Israel. Masdar committed an initial US$100 million, but this investment is expected to grow in coming years. The Abu Dhabi fund is seeking to support Israel’s move towards 30% renewables energy generation by 2030.
