BP plc and Abu Dhabi National Oil Co. (ADNOC) PJSC have jointly proposed to acquire 50 percent of the shares of NewMed Energy as a first step towards forming a joint venture, the British giant said on Tuesday.
The offer includes “all of the issued unit capital held by the public (approx. 45%) and approx. five percent of the issued unit capital of Delek Group, so that after the closing each of the Consortium [between BP and ADNOC] and Delek Group will hold 50 percent of the equity and controlling interests,” Delek subsidiary NewMed said on Tuesday.
Each unit will be sold at $3.4 (12.05 ILS) if the cash purchase is approved, NewMed told the Securities Authority and the Tel Aviv Stock Exchange Ltd. (TASE), saying it received the offer on Monday.
NewMed goes private if the offer goes through, BP said. According to NewMed, Delek owns 55% of the company, while public investors hold the remaining 45%.
“BP and ADNOC intend to form a new joint venture that will focus on gas development in international areas of mutual interest, including the Eastern Mediterranean. This proposed transaction with NewMed Energy would be an important first step in establishing this dynamic joint venture together with ADNOC,” the London-based company said in a statement.
“When completed, this would strengthen the wider strategic partnership between ADNOC and BP across oil and gas, hydrogen and carbon capture and storage technology and deepen the partners’ long-standing relationship.”
NewMed owns 45.3 percent of the Leviathan natural gas field offshore Israel, which it says is the largest in the Mediterranean with 22.9 trillion cubic feet of recoverable gas. Co-owned by Chevron (39.7%) and Ratio (15%), it began production in December 2019 “and has since become a cornerstone of gas supply to Israel, Egypt and Jordan,” it says NewMed on their website.
NewMed is expanding the Leviathan project to serve customers in Europe and Asia.
NewMed, which had a market capitalization of more than $3.3 billion (ILS 11.71 billion) as of Tuesday, said it has decided to appoint an audit team to examine the offer and will discuss the proposal with its parent company .
“The offer we received today is the result of the warm relationships and connections we have built over the last few years with the energy companies working in the region,” said NewMed CEO Yossi Abu. “The offering unlocks value for our investors and will catapult NewMed Energy from the regional stage to the global stage.”
NewMed closed up 36.68 percent in TASE trading on Tuesday.
Energy cooperation between Israel and the United Arab Emirates
ADNOC’s participation in the bid follows a flurry of energy and trade deals between Israel and the UAE since the establishment of diplomatic relations under a US-brokered deal in September 2020.
In the energy sector, Emirati firm Masdar and EDF Renewables announced in 2021 an agreement to explore renewable energy opportunities in Israel.
NewMed, then Delek Drilling, said in September 2021 it had signed an agreement with Mubadala Petroleum to sell a 22% non-operated stake in the Tamas gas field off the coast of Israel.
At last year’s COP27, Israel, Jordan and the United Arab Emirates signed a pact for solar energy and water trade between Israel and Jordan.
On Sunday, Israel and the United Arab Emirates signed a customs agreement to enforce their free trade treaty. Approved in 2022, the free trade agreement eliminates or gradually reduces customs duties on 96 percent of traded goods. Thani Al Zeyoudi, UAE Minister of State for Foreign Trade, also said the agreement paves the way for investments in renewable energy.
“The customs agreement that was signed today will lead to the implementation of the free trade agreement between Israel and the United Arab Emirates, which will reduce customs duties, lower the cost of living and inject energy into business between Israel and the United Arab Emirates,” Israeli. Prime Minister Benjamin Netanyahu said.
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