BP and Abu Dhabi National Oil Co. suspend major purchase in Israeli gas firm NewMed

Plans for a 50% stake purchase by energy major BP and the Abu Dhabi National Oil Co. (Adnoc) in Israeli gas producer NewMed Energy are on hold because of regional turbulence, NewMed said in a statement.

NewMed Energy, formerly Delek Drilling, owns a 30% stake in the Aphrodite field in Cyprus’ Exclusive Economic Zone (EEZ)

The three companies “have agreed, due to the uncertainty created by the external environment, to suspend discussions in relation to the proposed transaction,” the statement said.

The company’s share price dropped as much as 8% on the Tel Aviv stock exchange this week.

The statement also said that BP and Adnoc “reiterated [their] interest in the proposed transaction,” indicating that the deal was not permanently off the table. It added the process will remain suspended until it is terminated or talks pick up again.

“There can be no certainty that discussions will resume or that an agreement will be reached in the future,” it said.

Adnoc declined to comment when contacted by CNBC. BP was not immediately available for comment.

The original stake purchase offer was announced almost exactly one year ago in late March and would have led to a joint buy-in by BP and Adnoc to the tune of $2 billion for a 50% stake in the Israeli firm. The move would have granted the British and Emirati oil giants access to Israel’s expanding energy sector and more of the Eastern Mediterranean’s rich gas reserves.

At the time, BP and Adnoc said the deal would result in a joint venture from the two companies to focus on “gas development in international areas of mutual interest including the East Mediterranean.”

The two companies last month announced a separate gas joint venture in Egypt.

According to the CNBC report, the NewMed deal would have been a major political win for Israel, which has been pursuing closer ties with a number of Arab states ever since the signing of the Abraham Accords in 2020, which normalised diplomatic relations between Israel, the United Arab Emirates and Bahrain.

The UAE, along with other Arab governments, has vocally condemned Israel’s operations in Gaza.

(Source: CNBC)