Baku, March 29, AZERTAC

British multinational oil and gas firm BP plc and Abu Dhabi National Oil Co. (Adnoc) on Tuesday announced a joint bid to buy 50% of Israel’s NewMed Energy in a deal valued at about $2 billion, according to the Times of Israel.

As part of the non-binding offer, the two energy firms will buy 45% of the free floating shares the public holds in NewMed Energy, formerly Delek Drilling (part of Yitzhak Tshuva’s Delek Group), and about 5% of Delek Group’s stake to take the Israeli offshore natural gas producer private. Shares in NewMed jumped almost 30% in early afternoon trading in Tel Aviv.

The deal would give BP and Adnoc, the United Arab Emirates state-owned oil company, a foothold in Israel’s offshore natural gas fields and its growing energy export markets to pursue projects in eastern Mediterranean.

BP and Adnoc said they plan to form a joint venture for the purpose of the deal, which will be “focused on gas development in international areas of mutual interest including the East Mediterranean.”

The offer is another sign of the warming ties between the UAE and Israel after the two countries signed a normalization agreement in 2020 as part of the US-backed Abraham Accords. Back in 2021, Delek Drilling sold its 22% stake in Israel’s Tamar offshore gas field in the east Mediterranean to Abu Dhabi government-owned Mubadala Petroleum for about $1 billion.

NewMed is a key holder, with a 45% stake, in Israel’s Leviathan gas field off the Mediterranean coast, which contains an estimated 22 trillion cubic feet of gas, and was involved in the development of the Tamar, Karish, and Tanin natural gas fields.

Israel’s natural gas discoveries and operations in recent years have put the country on a path to energy independence and turned it into a gas exporter, while largely shielding it from the worst of the energy crisis sparked by the Russian war on Ukraine this year, in a region with few natural resources.

Currently, a maximum capacity of 12 billion cubic meters per year is piped up from the Leviathan reservoir for the supply and sale of gas to Israel, Egypt, and Jordan. In recent weeks, partners in the Leviathan gas field operated by US energy giant Chevron announced the exploration of plans for a floating liquefied natural gas (LNG) terminal off the Israeli coast and a third subsea transmission pipeline to boost gas production and enable exports to Europe and Asia.

NewMed CEO Yossi Abu hailed the BP-Adnoc deal as a springboard to “catapult NewMed Energy from the regional to the global stage.”