bp, ADNOC suspend $2 billion NewMed Energy bid as Israel-Gaza conflict rages
(Bloomberg) -- bp Plc and the United Arab Emirates’ state oil firm ADNOC suspended a $2 billion bid to buy a major stake in Israel’s NewMed Energy as the war in Gaza upends politics across the region.
The companies halted talks because of “uncertainty created in the external environment,” according to a statement from NewMed. Despite the pause, the Israeli firm said bp and ADNOC “again expressed interest in the proposed transaction.”
Shares of NewMed fell as much as 8% in Tel Aviv.
The deal was announced in March last year, highlighting the burgeoning financial ties between the UAE and Israel since the normalization of diplomatic relations. At the time, the countries said the political accord would lead to billions of dollars of investment.
But negotiations between NewMed, bp and ADNOC were thrown off course by Hamas’s Oct. 7 attack on Israel, which strained ties with Arab states as Israeli forces launched an assault on Gaza.
The NewMed deal would have extended bp’s presence in the eastern Mediterranean while marking ADNOC’s first foray into the region. The two companies continue to work on other projects together, having last month said they would form a joint venture in Egypt focusing on natural gas.
ADNOC is also pressing ahead with its own plans to build a global natural gas business. On Tuesday it said it would make final investment decision on a liquefied natural gas export plant this year. The United Arab Emirates is expanding its gas output to become self-sufficient in the fuel by the end of the decade.
NewMed owns a 45% stake in Leviathan, Israel’s biggest gas field, and 30% of Aphrodite, located off Cyprus. Soon after the war started, Israel shut down one of its biggest fields, called Tamar, citing safety concerns. But it was restarted in November and since then the country’s gas production has been steady.
