BP teams up with Abu Dhabi oil group in bid for Israel’s NewMed


BP has teamed up with the Abu Dhabi National Oil Company to launch a bid for an Israeli natural gas group as part of a plan to jointly pursue gas projects in the eastern Mediterranean.

Tel Aviv-listed NewMed, which has a market capitalisation of Shk8.6bn ($2.4bn), is majority owned by Israel’s Delek Group. BP said it had partnered with Adnoc to make a non-binding offer to take the company private by acquiring the free float and part of Delek’s stake. If the bid succeeds, BP and Adnoc would own more than 50 per cent of NewMed.

“BP and Adnoc intend to form a new joint venture that will be focused on gas development in international areas of mutual interest including the east Mediterranean,” the UK energy major said in a statement on Tuesday. “This proposed transaction with NewMed Energy would be a significant first step in establishing this dynamic joint venture together with Adnoc.”

NewMed holds the largest stake in the giant Leviathan offshore field, operated by Chevron, approximately 130km off the Israeli coast. Discovered in 2010, it produces 12bn cubic metres of gas a year and supplies Israel, Egypt and Jordan.

NewMed’s shares surged 25 per cent on Tuesday morning. BP’s stock was up 2 per cent.

Adnoc said the deal, if completed, would “strengthen the broader strategic partnership between Adnoc and BP”. It would also represent a further step in strengthening commercial ties between the United Arab Emirates and Israel after the two countries agreed to normalise relations in a 2020 agreement brokered by the US. Israel and the UAE last week signed a trade pact to reduce or remove tariffs on most goods traded between the nations.

BP moved in February to slow its retreat from oil and gas in response to what chief executive Bernard Looney said were increased calls for the company to invest in “today’s energy system”.

NewMed had been in merger talks with UK group Capricorn Energy, previously known as Cairn Energy, but activist investors scuppered the deal.

The proposed transaction with BP and Adnoc comes amid growing co-operation between Israel and some of its Middle Eastern neighbours.

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