Israel’s NewMed says BP, ADNOC offer on hold

A $2bn offer by Abu Dhabi’s national oil company (ADNOC) and BP to buy a 50 per cent 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 ADNOC and BP have reaffirmed their interest in the deal.

The announcement sent NewMed‘s share price down by nearly 8 per cent in Tel Aviv morning trade. Shares in its parent company, Delek Group, fell nearly 4 per cent.

ADNOC looks at Eastern Mediterranean

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 per cent, 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”.

“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.

BP, ADNOC partnership to continue

NewMed is the largest stakeholder in the huge Leviathan offshore field, operated by Chevron, 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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