BP, UAE suspend $2 bn gas deal in Israel

BP declined to comment beyond confirming the content of the NewMed statement. Adnoc declined to comment. NewMed Energy’s shares fell as much as 7% in Tel Aviv…reports Asian Lite News

BP and an oil company owned by the United Arab Emirates have shelved talks to buy a 50% stake in Israel’s leading natural gas producer, judging the $2 billion deal too risky as the war in Gaza rages.

NewMed Energy said Wednesday that all three companies had agreed to “suspend discussions” on the deal “due to the uncertainty created by the external environment.”

BP (BP) and Abu Dhabi’s state oil company Adnoc had “reiterated… interest in the proposed transaction,” it added in a statement, without detailing the conditions under which talks might resume.

“There can be no certainty that discussions will resume or that an agreement will be reached in the future, nor as to the terms of an agreement should one be reached,” NewMed Energy said.

BP declined to comment beyond confirming the content of the NewMed statement. Adnoc declined to comment. NewMed Energy’s shares fell as much as 7% in Tel Aviv.

The development highlights the impact the war in Gaza is having on companies doing business in the Middle East. Several Western brands, including Starbucks, McDonald’s, KFC and Pizza Hut, have faced boycotts in the region by customers who perceive them as supporting or having ties to Israel’s war in Gaza.

BP announced the proposed investment in NewMed Energy just under a year ago as part of a plan to form a joint venture with Adnoc to extract natural gas in “areas of mutual interest,” including in the eastern Mediterranean.

The proposed transaction was widely seen as evidence of deepening financial ties between Israel and the UAE following the normalization of diplomatic relations in 2020. But the war has strained those ties, and the UAE has repeatedly called for an “immediate ceasefire” in Gaza.

In the days immediately following the October 7 Hamas attacks on Israel, which triggered the war, a BP executive told investors that the company remained “optimistic” about the prospects for the NewMed deal, according to media reports.

BP and Adnoc were to acquire 50% of NewMed Energy by buying the company’s publicly traded shares, plus part of a stake held by Delek, an Israeli energy conglomerate.

NewMed owns 45.34% of the Leviathan Reservoir, the largest gas reservoir in the Mediterranean and the location of one of the world’s biggest deepwater gas discoveries. Chevron holds a 39.66% stake in the reservoir.

Separately, BP was one of six companies awarded licenses by Israel’s energy ministry in October to explore for natural gas off the country’s Mediterranean cost.

The British oil company and Adnoc continue to work on other projects together. Last month, they announced a joint venture to develop natural gas assets in Egypt.

UAE-US non-oil trade reached $31.4 bn in 2023

Danny E Sebright, President of the US-UAE Business Council, said that the volume of non-oil trade between the UAE and the United States reached USD 31.4 billion in 2023, and is expected to continue growing at the same pace in 2024.

Sebright added, in statements to the Emirates News Agency (WAM), that US exports to the UAE reached $24.8 billion last year, exceeding 2022 exports of USD 20.8 billion, by 19 percent, noting that the UAE remained the top US export destination in the Middle East and Africa for the fifth consecutive year.

The President of the US-UAE Business Council highlighted that US exports to the UAE support 125,000 jobs in the US, while UAE exports to the US totaled USD 6.6 billion last year.

Sebright said that UAE investments in the US market continue to grow, focusing on various sectors including real estate, manufacturing, healthcare, and technology. He pointed to three areas with greater potential for further cooperation between the two countries in 2024: healthcare and life sciences, financial services and private equity, and technology and artificial intelligence.

Sebright said that the UAE and the United States continue to build on the tremendous progress made last year in the lead-up to the UN Climate Change Conference (COP28) in the areas of renewable energy, food security, and sustainability, in addition to the continued strength of traditional foundations of the bilateral trade relationship between the two countries in sectors such as space, defence, and energy. (ANI/WAM)

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