BP, ADNOC place $4 bln joint bid for 50% of Israel's NewMed Energy

AFP , Tuesday 28 Mar 2023

Gas giants British Petroleum (BP) and Abu Dhabi National Oil Company (ADNOC) placed together a $4 billion offer to purchase half of NewMed Energy, the Israeli company said Tuesday.

Leviathan gas field
An offshore platform at NewMed s Leviathan gas field in the Mediterranean Sea. Photo courtesy of NewMed


The participation of Emirati firm ADNOC is the latest sign of the quickening normalisation of relations between Israel and the UAE since their opening of diplomatic relations in 2020 and their signing of a free trade deal last year which takes effect next month.

NewMed, which holds 45 percent of Israel's Leviathan offshore gas field, said the "non-binding indicative offer" was received on Monday, noting it had appointed an audit committee to examine the deal.

The cash purchase would include all of NewMed's publicly held participation units, and a small number of participation units held by Israeli holding firm Delek, of which NewMed is a subsidiary.

BP said that "together with ADNOC, it has made a non-binding offer to take NewMed Energy private through an acquisition of the free float and a partial acquisition of Delek's stake, which would result in BP and ADNOC holding 50 percent of NewMed Energy."

The deal would "be a significant first step" in BP and ADNOC's intention "to form a new joint venture that will be focused on gas development in international areas of mutual interest, including the East Mediterranean," BP said in a statement.

NewMed CEO Yossi Abu said the offer was "the result of the warm relationships and bridges we have built in recent years with the energy companies working in the region".

To Abu, the offer was also "an important vote of confidence" in "the Israeli gas market in general, and to the business and assets of NewMed Energy in particular," a company statement said.

Leviathan, discovered 130 kilometres (80 miles) west of the Mediterranean port city Haifa in 2010, is estimated by NewMed to hold 605 billion cubic metres (21.3 trillion cubic feet) of natural gas, along with 34.1 million barrels of condensate.

Production began in December 2019. The field is connected by a pipeline to Israel, which uses part of the gas with the rest exported to neighbouring Egypt and Jordan.

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