With a 45.3% stake, NewMed is the largest shareholder in the Leviathan gas field. Credit: Wonita or Troy Janzen/Pixabay.

BP has told investors that its $2bn bid, with Abu Dhabi National Oil Company (ADNOC), to buy a 50% stake in Israel-based gas producer NewMed Energy is still on track, reported Reuters.

In a bp strategy day meeting earlier in October 2023, bp head of gas and low carbon energy Anja-Isabel Dotzenrath told investors that the company is “very optimistic” about the deal.

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The UK oil and gas major’s assurance comes as the conflict between Israel and Hamas, a Palestinian militant group, escalates.

Earlier this year, bp and ADNOC made a non-binding bid for NewMed.

As per the proposal, bp and ADNOC proposed to buy 45% of NewMed’s free-floating shares as well as a 5% stake held by the Israeli conglomerate Delek Group.

With a 45.3% stake, NewMed is the largest shareholder in Israel’s massive offshore Leviathan gas field.

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Ratio owns 15% of Leviathan and Chevron owns the remaining 39.7%.

Last month, a panel of experts commissioned by NewMed recommended that bp and ADNOC increase the bid by over 10%.

According to a source, ADNOC, a UAE government-backed company, is also committed to the deal and still sees value in it.

Citing sources, Bloomberg reported that executives at bp and ADNOC expect the deal to get delayed as they debate whether to revise their initial offer for the Israeli natural gas producer.

The proposal for NewMed showed the growing financial links between Israel and the UAE after relations between the two countries were normalised.  

Although both companies are still committed to the agreement for the time being, some of the sources suggested that a rise in civilian fatalities would make it politically unacceptable for ADNOC to move ahead.

Earlier in October2023, Israel halted production at the Chevron-operated Tamar gas field due to security risks.