BP and Adnoc Form Gas Venture and Make $2 Billion NewMed Offer

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BP Plc and Abu Dhabi National Oil Co. will form a joint venture focused on natural gas and have made a non-binding offer to take Israel’s NewMed Energy private in a deal worth around $2 billion.

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The two companies plan to acquire 50% of NewMed by buying the roughly 45% of its stock that’s free floating and part of Delek Group Ltd.’s stake. They have offered 12.05 shekels for each purchased share, a premium of about 72% to NewMed’s closing price in Tel Aviv on Sunday of 7 shekels.

BP and Adnoc said their venture will work “on gas development in international areas of mutual interest including the East Mediterranean.”

East Med Finds

The region has seen several major natural gas finds in the past 15 years, including in Israel, Cyprus and Egypt. Those reserves have taken on added importance since Russia’s invasion of Ukraine, with Europe desperate to replace piped supplies from Moscow, easily its biggest supplier before the attack.

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NewMed owns a 45% stake in Leviathan, Israel’s biggest gas field, and 30% of Aphrodite, located off Cyprus.

Delek Group holds 55% of NewMed, which was called Delek Drilling until a rebranding early last year.

If approved, the deal will be Adnoc’s first major international acquisition of a gas- or oil-producing asset. The United Arab Emirates’ state energy producer — which has benefited from a surge in prices over the past year — in November said it would spend billions of dollars expanding its foreign gas, chemicals and clean-energy operations.

(An earlier version of this story corrected Adnoc’s full name.)

(Updates throughout.)