BP and Abu Dhabi's state oil giant on Tuesday offered to acquire 50% of Israeli offshore natural gas producer NewMed Energy for around $2 billion, making their entry into Israel's growing energy sector.
The offer would involve acquiring NewMed's free floating shares and taking the company private. BP shares gained 2% by 0810 GMT while NewMed shares were up around 30%.
Abu Dhabi National Oil Co and BP said they intend to form a new joint venture as part of the deal that will be "focused on gas development in international areas of mutual interest including the East Mediterranean.", which produces 12 billion cubic metres of gas that are supplied to Israel, Egypt and Jordan.
NewMed and its partners plan to nearly double Leviathan's production to 21 to 24 bcm by 2027 are also exploring plans for a liquefied natural gas terminal to further boost exports, Chief Executive Officer Yossi Abu told Reuters.The offer is a further sign of the strengthening economic links between Israel and the United Arab Emirates since the two countries agreed to normalise ties in 2020.from Delek Drilling a 22% stake in the east Mediterranean Tamar gas field for about $1 billion.
For BP, the deal highlights the British company's focus on growing natural gas production after Chief Executive Bernard Looney last monthThe offer price is 12.05 ILS per share, reflecting a 72% premium above the pre-deal market price, valuing the entire company at about 14.1 billion ILS, or $3.96 billion.
After the deal closes NewMed will become a private corporation equally held by the BP-ADNOC JV and Delek GroupReporting by Ashitha Shivaprasad in Bengaluru; editing by Louise Heavens, Jason Neely and Sharon SingletonRon has covered since 2014 the world’s top oil and gas companies, focusing on their efforts to shift into renewables and low carbon energy and the sector's turmoil during the COVID-19 pandemic and following Russia's invasion of Ukraine.
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