BP joins Adnoc in $2 billion gas deal hot on the heels of energy transition pivot

UK supermajor BP and Abu Dhabi National Oil Company (Adnoc) have agreed to jointly acquire a 50% stake in Israeli explorer NewMed Energy for approximately $2 billion.

NewMed Energy, a subsidiary of Delek Group, is the largest shareholder in the Leviathan gas project offshore Israel.

If the deal goes ahead, the BP-Adnoc consortium will acquire the 45% stake in NewMed now publicly held and 5% of issued capital from Delek Group.

The consortium has offered 2.05 Israeli New ShekelS ($3.36) per share, a 72% premium on pre-deal market price, NewMed said. Reuters put the value of the entire company at nearly $4 billion.

BP on Tuesday confirmed that it had made a nonbinding offer together with Adnoc to take NewMed Energy private through the acquisition of the free float and a partial acquisition of Delek’s stake, giving the consortium a 50% stake in the company led by chief executive Yossi Abu.

“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,” BP stated, calling the proposed transaction “a significant first step in establishing this dynamic joint venture”.

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The producing Leviathan field, discovered in late 2010 by Noble Energy, holds an estimated 22.9 trillion cubic feet of recoverable natural gas, .

Chevron, which acquired Noble Energy in 2020, operates Leviathan with 39.7% interest. NewMed holds 45.3% interest and Tel Aviv-based Ratio has a 15% working interest.