Israeli media reports that the State Oil Company of Azerbaijan Republic (SOCAR) is preparing to increase its participation in Israel’s energy sector, suggesting that this initiative could lead to new relationships between Israel, Azerbaijan, Turkey, Jordan, and Syria in the future.
According to the Israeli economic newspaper “Globes,” SOCAR is on the verge of signing a work plan with Israel’s Ministry of Energy and Infrastructure for gas exploration in Block I, located in the northwestern waters of Israel. This move follows an agreement in which Israeli businessman Aaron Frenkel sold half of his 10% stake in the Tamar gas field to the Azerbaijani energy company.
The Azerbaijani government considers the signing of the work program for Block I a “strategic step,” marking SOCAR’s first drilling operations outside Azerbaijan. The report indicates that a high-level official from the Azerbaijani government will also participate in the signing ceremony.
“Globes” claims that SOCAR’s involvement in gas exploration in Israeli-occupied waters could have significant geopolitical consequences. The report highlights SOCAR’s role as an important energy supplier for both Turkey and Israel. Over the past 17 years, SOCAR has invested $18.5 billion in Turkey, making it the largest foreign investor in the country and employing over 10,000 workers in its Turkish subsidiary.
With oil exports expected to generate $14.4 billion in revenue for Baku in 2024, this will position Israel as Azerbaijan’s sixth-largest market. Despite Turkey’s trade embargo against Israel, the AKP administration has not halted the transfer of Azerbaijani oil from Turkey to Haifa, a necessity driven by Ankara’s “energy dependency” on SOCAR and the need to maintain good relations with Azerbaijan.
Additionally, the close ties between Israel and Azerbaijan are underscored, as Azerbaijan has been the second largest customer of Israel’s defense industry from 2018 to 2022, accounting for over 9% of Israel’s total defense exports. The two countries collaborate to address the significant threat posed by Iran.
Last month, Hikmat Hajiyev, an aide to Azerbaijan’s president, met with Israeli Prime Minister Benjamin Netanyahu in Tel Aviv to discuss “regional processes.” The main regional issues discussed included efforts to “calm and mediate” concerning events in Syria. Shortly after, an aide to the Azerbaijani president traveled to Ankara to meet with Fahrettin Altun, the Director of Communications, where “regional and global” issues were reported to be on the agenda.
“Globes” points out that the agreement signed between the energy ministries of Azerbaijan and Israel has broader geopolitical significance. The activities of SOCAR in “Block I,” which is situated in waters disputed with Lebanon and Cyprus, might not face opposition from Turkey, as the country may not challenge SOCAR’s expansion in the region.
The report also suggests a potential project to connect the two countries via gas pipelines, with estimates that such a project could cost around $200 million. While this budget may not be substantial in the energy sector, “Globes” argues that the project could ultimately benefit all parties involved.
The revenue from gas and Turkey’s economic dependence on it are noted, with the expectation that this could bring more profit to Israel, while Jordan would receive royalties from transportation through its territory. Syria is also in a position to utilize imported gas profitably, potentially restoring its relationships with Israel as it moves closer to the West.