Narrative
Full Description
Project narrative
On December 20, 2021, a syndicate of 13 banks — including the Bank of China (BOC) — entered into a $720.00 million USD syndicated loan agreement with Tamar Investment 1 RSC Limited and Tamar Investment 2 RSC Limited — two United Arab Emirates (UAE)-incorporated special purpose vehicles (SPVs) indirectly wholly-owned by MDC Oil & Gas Holding Company LLC, a UAE-incorporated wholly-owned subsidiary of Mubadala Petroleum LLC (soon rebranded as Mubadala Energy), a UAE-incorporated international energy company headquartered in Abu Dhabi and a wholly-owned subsidiary of Mubadala Investment Company PJSC, the sovereign wealth fund of the Emirate of Abu Dhabi — to finance its acquisition of a 22% stake in the I/12 Tamar and I/13 Dalit Leases. This loan carried a maturity period of seven years and nine months (from drawdown) and a final maturity date of December 31, 2029. BOC contributed $62.00 million USD to the loan syndicate. In addition to BOC, the following lenders contributed to the loan syndicate: Abu Dhabi Commercial Bank PJSC (ADCB) ($48.00 million USD), Bank Hapoalim B.M. ($38.00 million USD), Bank Leumi ($32.00 million USD), Deutsche Bank AG ($62.00 million USD), HSBC Bank ($62.00 million USD), ING Group N.V. ($62.00 million USD), Israel Discount Bank ($48.00 million USD), JPMorgan Chase Bank, N.A. ($62.00 million USD), Bank Mizrahi-Tefahot ($58.00 million USD), Natixis ($62.00 million USD), Société Générale S.A. (SocGen) ($62.00 million USD), and Sumitomo Mitsui Banking Corporation (SMBC) ($62.00 million USD). In addition to the debt, Mubadala Petroleum provided $305 million USD in equity for the $1.025 billion USD acquisition and included a $75 million USD payment from Mubadala for the reservoir's total flow from January to August 2021. In April 2021, Israeli oil and gas company Delek Drilling - Limited Partnership signed a non-binding memorandum of understanding (MoU) with Mubadala Petroleum for the sale of Delek Drilling’s 22% stake in the I/12 Tamar and I/13 Dalit Leases for $1.1 billion USD. Then, in September 2, 2021, Mubadala Petroleum signed a binding $1.1 billion USD sale and purchase agreement with Delek Drilling for the 22% stake, consisting of an unconditional payment of $1 billion USD and a contingent payment of up $100 million USD subject to certain terms and goals, with an expected payment of $1.025 billion USD. Tamar Investment 1 RSC Limited and Tamar Investment 2 RSC Limited would each take 11% of the two leases, giving total ownership of 22%. In addition to the rights in the leases, they would acquire Delek's partnership interest in Tamar 10 Inch Pipeline Ltd. (which holders the transmission license), and its rights and oligations for the operation of the leases, including the agreement for the use of the Yam Tethys facilities, the agreements for the sale of natural gas and condensate from the Tamar lease, agreements for the export of natural gas and related permits, and other related agreements between the owners of the rights in the leases. Additionally, the deal included a secondary transaction option, to sell 100% of the shares of one of either Tamar Investment 1 or Tamar Investment 2. The Petroleum Commissioner of Israel approved the transaction. The acquisition was completed on December 9, 2021. The acquisition sought to acquire a 22% stake in the I/12 Tamar and I/13 Dalit Leases production leases, including the Tamar Gas Field located offshore about 90 kilometers west of Haifa, 5,000 meters below sea level, in a water depth of about 1,700 meters. Tamar was discovered in 2009 and began production in 2013, supplying natural gas predominantly to the Israeli local market, with additional volumes exported to Egypt and Jordan. The natural gas was extracted through five production wells and flows through two 140-kilometer long pipelines to the primary and main processing facility on the Tamar Platform where most gas processing is done, with the natural gas then transmitted from the platform through a pipeline to the onshore terminal in Ashdod, and into the Israeli market through the INGL national gas pipeline, with a proportion further exported to Egypt and Jordan. The Tamar gas field has an annual capacity of 11 billion cubic meters (bcm) and contained BCM about 300 bcm (10.48 trillion cubic feet (TCF)) of remaining gas reserves, producing “dry and sweet” gas requiring minimum processing before customer supply, and 14 million barrels of condensate. Chevron is the operator. The acquisition was claimed to be largest commercial agreement to be signed between the United Arab Emirates and Israel since the signing of the Abraham Accords in September 2020. The entry of Mubadala Petroleum into Israeli's natural gas sector was claimed by Israel's Ministry of Energy and Infrastructure as the beginning of further collaboration that geopolitical tensions forestalled. Delek Group's exit from Tamar was a completion of Israel's natural gas framework, which sought to develop the natural gas reservoirs Leviathan and Karish while breaking up the gas monopoly and creating competition in the sector, improve Israel's geopolitical status through export agreements to Egypt and Jordan, and lower the price of gas sold in Israel. The secondary transaction to sell one of the two SPVs for this transaction was exercised, with Mubadala Petroleum selling one of them, representing a 11% stake in the leases, to Israeli businessman Aaron Frenkel later in 2022.