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BP and Abu Dhabi's state oil giant make $2bn bid to buy 50% of Israelis natural gas firm NewMed Energy

This Is Money logo This Is Money 28/03/2023 Camilla Canocchi for and Reuters

BP and Abu Dhabi's state oil giant have made a non-binding offer to acquire 50 per cent of Israeli offshore natural gas producer NewMed Energy for around $2billion (£1.6billion).

If the deal goes ahead it would mark BP's entry into Israel's growing energy sector, at a time when the oil giant is rowing back on its climate pledges to focus on growing natural gas production.

BP and Abu Dhabi National Oil Co (Adnoc) said they intend to form a new joint venture as part of the deal, which would see NewMed Energy be taken private.

If the deal goes ahead it would mark BP's entry into Israel's growing energy sector © Provided by This Is Money If the deal goes ahead it would mark BP's entry into Israel's growing energy sector

'When completed, this would strengthen the broader strategic partnership between Adnoc and BP across oil and gas, hydrogen and carbon capture and storage technology and would deepen the partners’ long-standing relationship,' BP said.

NewMed is the largest stakeholder in the giant, Chevron-operated Leviathan offshore field, which produces 12billion cubic metres of gas that are supplied to Israel, Egypt and Jordan.

Earlier this year, Capricorn Energy attempted to merge with NewMed, but eventually pulled the plug on the deal in February after facing opposition by activist investor Palliser Capital and some of the company’s biggest shareholders. 

BP said the bid for NewMed was 'consistent' with its strategy and 'financial frame including current guidance for capital expenditure'. 

'The two companies intend to explore a range of mechanisms for the formation and potential further expansion of their new partnership,' it added.

In February, BP announced it would scale back its climate change plans after raking in record profits on the back of soaring energy prices.

In an apparent U-turn by chief executive Bernard Looney, the energy company said it planned to cut oil and gas production by just 25 per cent between 2019 and 2030 – well short of its more ambitious previous target of a 40 per cent reduction.

The move, which sparked outrage among climate change campaigners, came as BP reported profits of £23billion for 2022 – the highest in its 114-year history.

BP shares were 2.4 per cent higher at 508.50p towards market close on Tuesday. They have soared by around a third over the last year. 


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