Israel's NewMed says BP, ADNOC buy-in offer on hold
Reuters
Published Mar 13, 2024 08:50
Updated Mar 13, 2024 09:50
JERUSALEM (Reuters) -A $2 billion offer by Abu Dhabi's national oil company and BP (LON:BP) to buy a 50% stake in Israeli gas producer NewMed has been put on hold due to uncertainty in the region, NewMed said on Wednesday.
NewMed said all parties had agreed to pause negotiations, although Abu Dhabi National Oil Co (ADNOC) and BP have reaffirmed their interest in the deal.
The announcement sent NewMed's share price down by nearly 8% in Tel Aviv morning trade. Shares in its parent company, Delek Group, fell nearly 4%.
Britain's BP and ADNOC made their offer a year ago, with an aim to form a joint venture that would give them access to gas-rich areas in the Eastern Mediterranean and Israel's energy sector.
Along the way, a panel reviewing the offer for NewMed recommended to raise the asking price by 10%, according to sources.
NewMed said in a regulatory filing that the panel, BP and ADNOC had agreed to put the deal on hold due to uncertainty in the "external environment", presumably referring to the war in Gaza and fighting on the Israel-Lebanon border.
"The process was suspended until the date that it will be renewed or the process is ended," the Israeli firm said.
BP declined to comment beyond the NewMed statement while there was no immediate comment from ADNOC.
NewMed is the largest stakeholder in the huge Leviathan offshore field, operated by Chevron (NYSE:CVX), which exports gas to Egypt and Jordan.
"The regional conditions and geopolitical issues have made it difficult. Once things calm down, we hope to return to the process and complete it successfully," said a source close to the deal.
BP and ADNOC said last month they would form a joint venture in Egypt focused on natural gas. It was originally planned to be the second phase of their cooperation in the Eastern Mediterranean after the NewMed deal.
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Written By: Reuters
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