BP and the Abu Dhabi National Oil Company (ADNOC) have suspended talks to buy a 50% stake in Israel’s natural gas producer NewMed, due to uncertainty in the region, the Israeli company said on Wednesday.
In March 2023, BP and the national oil company of one of the leading Middle Eastern oil and gas producers, the United Arab Emirates (UAE), offered to buy a large stake in NewMed in a deal estimated to be worth around $2 billion.
NewMed is the largest shareholder in Israel’s Leviathan natural gas field, which is operated by U.S. supermajor Chevron. Leviathan, with 22.9 TCF of recoverable gas, is the largest natural gas reservoir in the Mediterranean, and one of the largest producing assets in the region, NewMed says.
The company also has a 30% working interest in the Aphrodite natural gas field, located in the exclusive economic zone of Cyprus, with Chevron and Shell as partners with 35% each.
With the deal proposed last year, BP and ADNOC were looking to gain exposure to the vast natural gas reserves in the Eastern Mediterranean.
However, the Hamas attack on Israel in early October and the war that followed have thrown discussions off course.
NewMed’s panel reviewing the offer and the two majors have agreed, “due to the uncertainty created by the external environment, to suspend discussions in relation to the proposed transaction,” the Israeli energy firm said in a filing to the Tel Aviv Stock Exchange today.
BP and ADNOC reiterated their interest in the proposed transaction, NewMed added.
“The process will remain suspended until such time as discussions resume or the process is terminated. There can be no certainty that discussions will resume or that an agreement will be reached in the future, nor as to the terms of an agreement should one be reached,” the company noted.
By Tsvetana Paraskova for Oilprice.com
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