Israeli energy investment tests South Africa’s political divide

At a time when South Africa has become one of Israel’s most outspoken international critics, an Israeli energy company is making one of the largest commercial commitments by an Israeli firm in the country since diplomatic relations sharply deteriorated.

Earlier this year, Navitas Petroleum, dual-listed on the Tel Aviv Stock Exchange and NASDAQ, announced that it had signed an agreement to acquire a 37.5% operating interest in Block 1 CBK, an offshore exploration block in South Africa’s Orange Basin covering nearly 20,000 square kilometers (7,700 square miles) off the country’s west coast near the Namibian border.

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The company, whose portfolio includes offshore oil and gas projects in the Eastern Mediterranean, Gulf of Mexico and elsewhere, also secured an option to increase its stake in the future, subject to regulatory approvals. The deal will make the Israeli company operator of the license and marks another step in its international expansion.

Navitas declined to comment on the development, which was reported by the South African Jewish Report.

The Orange Basin has rapidly emerged as one of the world’s hottest offshore oil and gas frontiers following a string of major discoveries over the past four years. Energy giants including TotalEnergies, Shell and Galp have announced significant finds, transforming the basin into one of the industry’s most sought-after regions. Analysts view it as one of the few remaining frontier basins capable of producing multiple billion-barrel discoveries.

The investment comes at a politically delicate moment.

Since Hamas’s Oct. 7, 2023, attacks on Israel and the war that followed, South Africa has positioned itself among Israel’s fiercest international critics. Pretoria’s decision to bring a genocide case against Israel before the International Court of Justice in The Hague marked a low point in bilateral relations, while senior South African officials have repeatedly accused Israel of violating international law in Gaza.

Against that backdrop, the Navitas announcement quickly became the focus of political controversy.

Environmental advocacy group The Green Connection called on South African President Cyril Ramaphosa to adopt a policy barring Israeli companies from operating in South Africa’s offshore energy sector, arguing that such investment was incompatible with the country’s position before the ICJ.

In a separate opinion article published in The Star, Economic Freedom Fighters parliamentarian Carl Niehaus urged the government to halt the transaction, writing that Israeli companies “have no place in our waters or our economy.”

The debate surrounding a single energy deal has exposed a broader question: Has the collapse in diplomatic relations between Jerusalem and Pretoria translated into a corresponding breakdown in commercial ties?

According to Daniel Yakcobi, CEO of the South African Friends of Israel and the South African Israel Chamber of Commerce, the answer is no.

“Commercial relations remain far more resilient than the political relationship suggests,” Yakcobi told JNS.

“While government-to-government ties are at a historic low, businesses in both countries continue to see clear value in cooperation.”

That distinction, he argues, reflects the fundamentally different forces driving diplomacy and commerce.

While political tensions have unquestionably affected the business climate, companies continue making decisions primarily on commercial considerations.

“South African and Israeli companies are still trading, forming partnerships and exploring investment opportunities,” Yakcobi said. “Trade is driven by demand, innovation, expertise and mutual benefit—not only political sentiment.”

He acknowledges that the relationship has changed.

“The main change has been greater political and reputational sensitivity,” he said. “Some transactions now require more internal scrutiny, but the underlying commercial demand remains intact.”

That increased scrutiny has led some South African companies, particularly larger institutions, to approach Israeli partnerships more cautiously because of public campaigns, shareholder pressure and reputational concerns.

Yet Yakcobi believes caution should not be mistaken for disengagement.

“Most businesses still evaluate opportunities on commercial merit,” he said. “Many South African executives recognize that excluding Israeli technology or expertise for political reasons could reduce competitiveness.”

In many cases, he said, commercial cooperation has simply become less visible.

“Some companies prefer to avoid unnecessary publicity,” Yakcobi said. “The partnerships continue, but they’re often conducted with a lower public profile than before.”

For Yakcobi, the Navitas investment itself demonstrates that commercial considerations continue to outweigh political disagreements for many businesses.

“An Israeli-headquartered company committing capital and expertise signals that commercial logic and confidence in South Africa’s resources can persist despite political differences,” he said.

“Israeli companies continue to see South Africa as a market where they can contribute technology, investment and specialist expertise, even while the political environment has become more challenging.”

‘The fit between the two economies remains strong’

Despite the political headwinds, Yakcobi believes the underlying economic relationship remains compelling because the two economies complement rather than compete.

“South Africa offers scale, natural resources, industrial capacity and access to the African continent,” he said. “Israel brings advanced technology, research, entrepreneurship and solutions to pressing challenges.”

That combination, he said, continues to create opportunities across sectors including agriculture and agri-tech, water management, food technology, cybersecurity, fintech, healthcare, renewable energy and mining technology.

“The fit between the two economies remains strong,” Yakcobi said.

Energy is now emerging as another area of potential cooperation.

South Africa has long grappled with electricity shortages, aging infrastructure and the challenge of balancing economic growth with energy security. Although commercial production in the Orange Basin remains years away, the discoveries have generated optimism that domestic oil and gas resources could help reshape the country’s energy future while attracting billions of dollars in foreign investment.

For Israeli companies with offshore exploration expertise, the basin represents an opportunity that is difficult to ignore.

Recent trade patterns also suggest that, despite the diplomatic rift, commercial ties have endured. South Africa continues to export commodities and agricultural products to Israel, while Israeli companies remain active in sectors where their technology and expertise address South African needs.

Yakcobi cautions, however, against interpreting that resilience as immunity from politics.

“There is no question that the political environment has become more complicated,” he said. “Investors value predictability and stability. Political uncertainty inevitably becomes another factor businesses have to consider.”

While some Israeli companies have delayed investment decisions or reassessed their exposure, he said he has not observed any broad withdrawal from the South African market.

“There has not been a systematic exit,” Yakcobi said. “Some firms may delay decisions because investors value stability, but many Israeli companies continue to take a long-term view and see significant opportunity in South Africa.”

He believes the same commercial logic applies to South African companies considering partnerships with Israeli firms.

“Businesses ultimately have to remain competitive,” he said. “If an Israeli solution is the best solution, many companies will still pursue it.”

One of the biggest misconceptions surrounding the bilateral relationship, Yakcobi argues, is that South Africa’s increasingly hostile political rhetoric has effectively shut down trade with Israel.

“They have not,” he said. “Political rhetoric is highly visible, while day-to-day trade and investment activity is much less visible. That creates a distorted public perception.”

He also rejects the notion that doing business with Israel necessarily constitutes support for Israeli government policy.

“Trade is not political endorsement,” Yakcobi said. “It creates jobs, transfers knowledge and delivers solutions.”

South Africa, he noted, maintains commercial relationships with many countries despite political disagreements, and he argues that Israel should be viewed through the same commercial lens.

Looking ahead, Yakcobi believes the opportunities for cooperation remain substantial despite diplomatic uncertainty.

South Africa continues to require investment, innovation, water technologies, agricultural solutions and energy expertise, while Israeli companies continue seeking overseas markets where their technology and experience can add value.

“The main constraint is not opportunity,” he said. “It is political uncertainty and perceptions around fairness and predictability for Israeli businesses.”

For organizations such as the South African Israel Chamber of Commerce, that means continuing to strengthen commercial relationships regardless of the political climate.

“Our role is to maintain the commercial bridge,” Yakcobi said. “Governments may disagree, but businesses and innovators must continue building relationships that serve long-term mutual interests.”

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