BP confirmed that, together with ADNOC, it has made a non-binding offer to take Newmed Energy Private. Image Credit: Reuters

Dubai: BP Plc and Abu Dhabi National Oil Co. will form a joint venture focused on natural gas and have made a non-binding offer to take Israel's NewMed Energy private in a deal worth around $2 billion.

The two companies plan to acquire 50 per cent of NewMed by buying the roughly 45 per cent of its stock that's free floating and part of Delek Group's stake. They have offered 12.05 shekels for each purchased share, a premium of about 72 per cent to NewMed's closing price in Tel Aviv on Sunday of 7 shekels.

BP and ADNOC said their venture will work "on gas development in international areas of mutual interest including the East Mediterranean."

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East Med finds

The region has seen several major natural gas finds in the past 15 years, including in Israel, Cyprus and Egypt. Those reserves have taken on added importance since Russia's attack on Ukraine, with Europe desperate to replace piped supplies from Moscow, easily its biggest supplier before the attack.

NewMed owns a 45 per cent stake in Leviathan, Israel's biggest gas field, and 30 per cent of Aphrodite, located off Cyprus.

Delek Group holds 55 per cent of NewMed, which was called Delek Drilling until a rebranding early last year.

If approved, the deal will be ADNOC's first major international acquisition of a gas- or oil-producing asset. The UAE’s state energy producer in November said it would spend billions of dollars expanding its foreign gas, chemicals and clean-energy operations.