Azerbaijan's SOCAR, Israel's Union Energy form Malta JV

Azerbaijan’s state oil company SOCAR and Israeli firm Union Energy & Systems have established a joint venture in Malta to engage in natural gas development and production, the Malta Competition and Consumer Affairs Authority (MCCAA) announced on April 15.

The new entity, Union Energy & Systems Operations Malta, received regulatory clearance on April 3 under MCCAA’s simplified merger review process. The application was originally filed on March 11 via a share subscription agreement.

Following an assessment, the Maltese competition authority concluded that the transaction meets the criteria for a simplified procedure and does not infringe competition law, thereby approving the formation of the joint venture.

SOCAR and Union Energy will share joint control of the venture, which will focus on the exploration and development of gas deposits, leveraging SOCAR’s upstream and transportation capabilities.

While Azerbaijan and Israel have long-standing cooperation in defence and intelligence, they have recently significantly expanded their energy collaboration. The Malta joint venture follows a series of recent agreements between SOCAR and Union Energy. On January 31, SOCAR acquired a 10% stake in the Tamar offshore gas field in Israel – one of the largest in the Eastern Mediterranean. This was followed by the signing of a non-binding memorandum of understanding between the pair on March 17 to explore additional gas opportunities in Israel’s exclusive economic zone.

Union Energy & Systems is a private Maltese-registered company wholly owned by Israeli businessman Aaron Frenkel, who also controls the wider Union Energy group. The company operates in the natural gas sector through its subsidiaries.

SOCAR is active across the entire oil and gas value chain, including upstream, midstream, refining and marketing. It also maintains a presence in Malta through its LNG trading activities.

Frenkel, together with Abu Dhabi’s Mubadala, acquired a combined 22% stake in the Tamar field in 2021. In 2024, he added a further 3.5% stake – partly via Union Energy and partly through direct investment – bringing his total holding to around 20%. He has retained a 10% personal stake in the Tamar project, though the rationale behind this shareholding has not been publicly disclosed.

For Azerbaijan, participation in a major Eastern Mediterranean gas project enhances its position as a gas exporter to Europe, strengthening its strategic footprint in the region.