UK supermajor BP and Abu Dhabi National Oil Company (Adnoc) have agreed to jointly acquire a 50% stake in Israeli explorer NewMed Energy for about $2 billion.

NewMed Energy, a subsidiary of Delek Group, is the largest shareholder in the Leviathan gas project offshore Israel.

If the deal goes ahead, the BP-Adnoc consortium will acquire the 45% stake in NewMed and 5% of issued capital from Delek Group, further consolidating their green energy partnership announced last year.

The acquisition would also mark one of the largest commercial deals by Adnoc in the region, following a peace agreement between the United Arab Emirates and Israel in 2021, dubbed the Abraham Accords.

The consortium has offered 2.05 Israeli new shekels ($3.36) per share, a 72% premium on the pre-deal market price, NewMed said. Reuters put the value of the entire company at nearly $4 billion.

BP on Tuesday confirmed it had made a nonbinding offer together with Adnoc to take NewMed Energy private through the acquisition of the free float and partial acquisition of Delek’s stake, giving the consortium a 50% stake in the company led by chief executive Yossi Abu.

“BP and Adnoc intend to form a new joint venture focused on gas development in international areas of mutual interest including the East Mediterranean,” BP stated, calling the proposed transaction “a significant first step in establishing this dynamic joint venture”.

The producing Leviathan field, discovered in late 2010 by Noble Energy, holds an estimated 22.9 trillion cubic feet of recoverable natural gas.

Chevron, which acquired Noble Energy in 2020, operates Leviathan with 39.7% interest. NewMed holds a 45.3% interest and Tel Aviv-based Ratio has a 15% working interest.

Green Energy deal

Adnoc and BP last year signed deals to develop hydrogen and technology hubs in the UK and the UAE in a major cleaner-energy push, in signs of an improved relationship between the two players.

In the UK, Adnoc has joined the design phase of the H2Teesside blue hydrogen project, taking a 25% stake in the design stage and marking its first investment in the UK.

H2Teesside aims to develop two 500-megawatt hydrogen production units by 2030, with the project set to begin operations in 2027.

Abraham accords

The Abraham Accords, which included Bahrain, normalised relations between the three countries.

Israel and the UAE also signed multiple agreements on visa exemptions, aviation, economic co-operation and protection of investments in 2021.

The two nations have put in place a bilateral agreement that provides incentives and protection to investors in both countries.

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