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

Environment

A view of the platform of the Leviathan natural gas field in the Mediterranean Sea is pictured from the Israeli northern coastal beach of Nasholim, on August 29, 2022.
JACK GUEZ | AFP

DUBAI, United Arab Emirates — Plans for a 50% stake purchase by energy major BP and Abu Dhabi National Oil Company (Adnoc) in Israeli gas producer NewMed are on hold because of regional turbulence, NewMed said Wednesday.

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

The company’s share price dropped as much as 8% on the Tel Aviv stock exchange at the start of the trading day.

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 that 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 that 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.

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