Tel Aviv — Israel has issued exploration licenses to British energy giant BP, Azerbaijan’s state-owned Socar, and local firm NewMed Energy, signaling a significant move to expand its natural gas reserves and strengthen its export capabilities. Announced on March 18, 2025, this decision highlights Israel’s ambition to solidify its role in the evolving regional energy landscape.
The three companies formed a joint bid in 2023 during Israel’s fourth licensing round, seeking rights to explore two marine areas in the Mediterranean Sea. According to Israel’s Ministry of Energy, more licenses are expected, with a fifth bidding round planned for later this year.
Socar will lead the exploration efforts in “Cluster 1,” an area near the Leviathan gas field. BP is also entering the Israeli natural gas sector for the first time with this partnership. Socar’s involvement in this project follows its recent acquisition of a 10% stake in the Tamar gas field.
The timing of this agreement is crucial as Israel aims to strengthen its ties with Azerbaijan, which is seen as strategically important in counterbalancing Iran. The two countries have deepened their energy and defense cooperation, particularly as tensions in the Middle East remain high. Azerbaijan has supported Prime Minister Benjamin Netanyahu’s government in broader geopolitical matters.
NewMed Energy plays a key role in the Leviathan offshore field, which is operated by Chevron. Each of the three companies involved in the new exploration will hold roughly one-third of the rights in the licensed areas. Cluster 1 covers about 1,700 square kilometers in the northern part of Israel’s economic waters in the Mediterranean.
The first phase of the exploration will involve geological and seismic surveys, with drilling to follow, depending on the results of these surveys. Israel’s Minister of Energy, Eli Cohen, emphasized the strategic importance of natural gas, stating, “Natural gas is a strategic resource that strengthens our economic and diplomatic position globally, especially in the Middle East. We are committed to increasing our production for local use and exports, particularly in these challenging times.”
Israel is positioning itself as a regional energy hub, especially as Europe seeks alternative gas supplies due to the ongoing conflict in Ukraine. The Mediterranean gas basin, shared by Israel, Cyprus, Lebanon, and Egypt, has attracted major global energy companies, eager to tap into new sources of natural gas.
The Israeli Ministry of Energy reported earlier this month that exports of natural gas to Egypt and Jordan increased by 13.4% in 2024, indicating growing regional energy cooperation. As global demand for energy rises, the Mediterranean gas market is becoming more competitive, with many companies exploring new opportunities in the region.
Oil and gas exploration is a high-risk, high-reward endeavor, requiring extensive surveys and drilling that can take years to complete. As BP, Socar, and NewMed Energy embark on their exploration journey, the results could have significant economic implications for Israel and may also influence the region’s geopolitical dynamics.
Israel’s growing energy cooperation with Azerbaijan reflects the increasing interdependence of energy resources and defense strategies in a world where energy security is becoming ever more crucial. As Israel strengthens its role in regional energy markets, it also faces the complexities of navigating political tensions in the Middle East and beyond.
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