The Malta Competition and Consumer Affairs Authority (MCCAA) has approved the creation of a full-function joint venture between Azerbaijan’s state oil company SOCAR and Malta-based Union Energy & Systems A Ltd, granting them joint control over Union Energy & Systems Operations Malta Ltd.
The decision, issued on 3rd April 2025 under a simplified merger review procedure, clears the way for the two companies to collaborate on hydrocarbon production through a newly structured entity.
Union Energy & Systems operates through subsidiaries in the natural gas sector.
Under the terms of the deal, Union Energy & Systems A Ltd - a holding company owned by Israeli businessman Aaron Frenkel - will partner with SOCAR, one of the largest players in the global oil and gas sector, and control Union Energy & Systems Operations Malta Ltd, a company set up in 2021.
Businessman Aaron Frenkel is an influential multimillionaire Israeli businessman and owner of the Loyd's Group, a holding company that has invested in real estate and the aerospace industry. Mr Frenkel is the chairman of the Euro-Asian Jewish Congress (EAJC) and the Vice President of the World Jewish Congress (WJC).
The joint venture will focus on natural gas development and exploitation, leveraging SOCAR’s functions in upstream and midstream operations. The agreement was finalised through a subscription agreement, though financial details remain undisclosed.
The deal qualified for a simplified review process, reserved for transactions by the MCCAA, which deemed it unlikely to raise competition concerns. The regulator determined that the joint venture would operate independently and found no overlaps requiring deeper scrutiny. This partnership strengthens SOCAR’s footprint in Malta’s energy sector, particularly in natural gas and LNG operations. Union Energy & Systems Operations Malta Ltd could expand its hydrocarbon activities with SOCAR’s backing.
SOCAR, the Azerbaijani energy giant, has been entangled in multiple corruption scandals in Malta, including the Electrogas scandal, which implicated high-ranking Maltese officials in alleged kickbacks and money laundering. SOCAR’s Maltese trading arm has also faced past investigations over suspicious financial transactions.
