BP, ADNOC Make Offer for 50% of Israel’s NewMed Energy

The proposed transaction also would be the first step in establishing a joint venture between BP and ADNOC.

The Leviathan platform offshore Israel.
Source: Noble Energy

UK supermajor BP and Abu Dhabi National Oil Company (ADNOC) have made a nonbinding offer to take private the Israeli offshore natural gas producer NewMed Energy, a subsidiary of Delek Group.

The deal would see the BP-ADNOC consortium acquiring a 45% stake in the publicly held NewMed Energy, and 5% of issued capital from Delek Group. The offer price is 12.05 ILS ($3.38) per share, reflecting a 72% premium above the pre-deal market price, NewMed Energy said in a release.

NewMed Energy is the largest stakeholder in the giant Leviathan gas field offshore Israel. The Chevron-operated field was discovered in December 2010. It came online at the end of 2019, producing 12 billion m3 of gas per year for sale to Israel, Egypt, and Jordan.

If successful, the deal would expand BP’s footprint into the East Mediterranean and be ADNOC’s first undertaking in a region that has seen significant gas finds over the past decade and increasing importance to meeting European demand for natural gas.

The consortium said it intends 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. This proposed transaction with NewMed Energy would be a significant first step in establishing this dynamic joint venture together with ADNOC,” BP said in a statement regarding the bid.

BP said that when completed, the acquisition would “strengthen the broader strategic partnership between ADNOC and BP across oil and gas, hydrogen, and carbon capture and storage technology and would deepen the partners’ longstanding relationship.”

BP added that the proposed transaction is consistent with its stated strategy and that the consortium intends to “explore a range of mechanisms for the formation and potential further expansion of their new partnership.”