BP and Abu Dhabi National Oil Co’s (ADNOC) $2 billion bid to acquire a 50% stake in Israeli gas producer NewMed Energy remains on track, despite escalating geopolitical tensions in the region. BP’s head of gas and low carbon energy, Anja-Isabel Dotzenrath, expressed confidence in the deal during a BP strategy day in Denver, Colorado. The proposed acquisition is seen as a sign of strengthening economic ties between Israel and the United Arab Emirates following their normalization of relations in 2020.
NewMed Energy is the largest shareholder in Israel’s Leviathan offshore gas field, holding a 45.3% stake. Chevron and Ratio also have stakes in the field. However, doubts were cast on the deal after an independent panel appointed by NewMed recommended an increase in the asking price by over 10%.
Despite these challenges, BP maintains a positive outlook on the NewMed deal, considering it an example of innovative upstream partnership that highlights the attractiveness of the assets in the region. Jefferies analyst Giacomo Romeo noted that the recent geopolitical events and the request for a higher price by the reviewing panel did not deter BP from pursuing the deal.
ADNOC also reaffirmed its commitment to the acquisition, stating that it continues to see value in the proposed deal. The non-binding offer presented by BP and ADNOC involves purchasing 45% of NewMed’s free-floating shares and an additional 5% held by Israeli conglomerate Delek Group, leaving Delek with a 50% stake and taking the company private.
This bid not only signifies the growing economic ties between Israel and the UAE but also offers a glimpse into the potential for increased collaboration in the energy sector. The partnership between BP, ADNOC, and NewMed Energy is expected to contribute to the development of Israel’s offshore gas reserves and enhance energy security in the region.
With the deal remaining strong amid geopolitical tensions, it highlights the resilience and determination of the involved parties to pursue mutually beneficial partnerships despite the challenges. As the acquisition progresses, it will be interesting to observe the outcomes of this strategic move and the impact it will have on the energy landscape in Israel and the broader region.
In conclusion, BP and ADNOC’s $2 billion bid to acquire a 50% stake in Israeli gas producer NewMed Energy remains firmly intact, demonstrating a commitment to leveraging economic opportunities despite geopolitical tensions. The partnership holds significant potential for the energy sector and emphasizes the growing collaboration between Israel and the UAE.
