BP-ADNOC JV to buy 50% in Israel’s natural gas producer NewMed for $2 bn

March 29 -- BP and Abu Dhabi’s state oil giant ADNOC have offered to acquire 50 percent of Israel’s offshore natural gas producer NewMed Energy for around $2 billion.

The offer would involve acquiring NewMed’s free floating shares and taking the company private.

Abu Dhabi National Oil Co (ADNOC) 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.”

NewMed is the largest stakeholder in the giant Leviathan offshore field, operated by Chevron, which produces 12 billion cubic metres (bcm) 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 (LNG) terminal to further boost exports, Chief Executive Officer Yossi Abu told Reuters.

Last year, Abu Dhabi’s Mubadala Petroleum acquired from Delek Drilling a 22 percent 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 month slowed down its shift away from fossil fuels.

The offer price is 12.05 ILS ($3.38) per share, reflecting a 72 percent 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 Group, which holds the remaining 50 percent.