LNG

UK major BP and Abu Dhabi National Oil Company have decided not to proceed with a joint offer to take control of NewMed Energy, the Israeli natural gas company with LNG export plans and a supplier of pipeline gas to Israel, Egypt and Jordan.

A statement from NewMed said that the merger process was suspended because of the conflict in Gaza between Israeli military forces and the Hamas terrorist group and would not be proceeding in the near future.

The suspension would remain in force until discussions on an actual transaction resumed or were totally terminated.

“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,” explained NewMed.

“The NewMed Partnership will update unitholders of further developments as appropriate,” it added.

Suspension details

NewMed stated that the joint committee looking into the BP-ADNOC deal has agreed “due to the uncertainty created by the external environment” to suspend discussions in relation to the proposed transaction.

BP and ADNOC had previously made a non-binding offer in March 2023 to take NewMed Energy private and out of the Tel Aviv Stock Exchange through an acquisition of the free float listed shares and a partial acquisition of a stake still held by Israel's Delek Group.

The transaction would have resulted in BP and ADNOC holding 50 percent of NewMed Energy.

NewMed, a stakeholder with US major Chevron Corp. in the large Leviathan natural gas field offshore Israel, had previously approved budgets for 2023 including gas field development to provide feed gas for a floating LNG export project.

BP and ADNOC had intended to form a new joint venture that would have focused on “gas development in international areas of mutual interest including the East Mediterranean” region.

The proposed BP-ADNOC transaction followed a move by NewMed Energy itself to merge with Capricorn Energy of the UK but the Israelis later withdrew in February 2023 from that bid.

Main assets

The main NewMed asset, the Leviathan gas field, supplies the Israeli domestic market as well as exporting gas by pipelines to Egypt and Jordan.

The Leviathan project shareholders are the NewMed Partnership with 45.34 percent, Chevron subsidiary, Chevron Mediterranean Ltd with 39.66 percent, and Ratio Energies with 15 percent.

NewMed, which announced its name change from Delek Drilling to NewMed Energy in February 2022, also has a stake in the Aphrodite gas field in the offshore economic zone of Cyprus, making it one of the biggest players in the East Med.

Four months after the start of the Gaza conflict BP and ADNOC said in February 2024 that they had formed a joint venture in Egypt that would initially focus on natural gas and would incorporate Egyptian concession stakes held by BP.

That joint venture is expected to be formed in the second half of 2024 and will be 51 percent owned by BP and 49 percent by ADNOC.

The BP-ADNOC Egyptian joint venture was originally planned to be the second phase of cooperation between the two companies in the East Med gas and LNG province after the planned acquisition of the 50 percent stake in Israel’s NewMed.

Chevron Corp., the US oil and gas major with additional successful LNG plants in Australia and in Africa and a pipeline gas supply business in the Middle East, has overhauled its corporate structure and senior executive team to strengthen portfolio operations.

Chevron, based in San Ramon in California, said that from October 2022 the company would consolidate its Upstream, Midstream and Downstream business segments under a new executive vice president for Oil, Products & Gas, who will oversee the full value chain.

As part of this change, the company is consolidating into two Upstream regions, Americas Exploration & Production and International Exploration & Production.

The company is also organizing its Strategy & Sustainability, Corporate Affairs and Business Development functions under a new executive vice president for Strategy, Policy & Development.

“The changes build on the company’s enterprise-wide transformation in 2020, which has produced improved operational and financial results,” said Chevron.

Chevron believes the new leadership structure will enable a more integrated approach to capital allocation, asset class excellence and value-chain optimization, and “facilitate more effective external engagement and business development” impacts.

Progress

“We’ve made significant progress over the last two years, and these changes position us to further enhance execution across all aspects of our business as the energy system evolves,” said Mike Wirth, Chevron’s Chairman and Chief Executive.

“It will also bring strategy, policy and business development into tighter alignment as we focus on leveraging our strengths to deliver lower carbon energy to a growing world,” stated Wirth.

The company made the following personnel appointments, effective October 1, 2022:

Mark Nelson was named executive vice president, Strategy, Policy & Development and Nigel Hearne is the new executive vice president, Oil, Products & Gas. Nelson and Hearne will report to Wirth in their new roles.

Clay Neff is the new president, International Exploration & Production; Bruce Niemeyer was named president, Americas Exploration & Production; and Balaji Krishnamurthy is taking the vice president role for Chevron Strategy & Sustainability.

LNG operations

Chevron’s major LNG activities are as the operator of three plants, Gorgon LNG and Wheatstone LNG in Western Australia and Angola LNG in southwest Africa.

Additionally, Chevron took over natural gas fields and assets offshore Israel when it acquired Noble Energy.

The company made additional personnel announcements regarding other senior executives.

Jay Johnson, executive vice president, Upstream, was named executive vice president, senior advisor, effective October 1, 2022, and will support the transition until January 31, 2023.

Johnson has more than 41 years of service to the company.

Retirees

Jay Pryor, vice president, Chevron Business Development, will retire after more than 43 years of service to the company, effective July 29, 2022.

Steve Green, president, Chevron North America Exploration & Production, will also retire after more than 24 years of service to the company and its predecessors, effective September 30, 2022.

“I’m confident that our new team will continue to effectively lead the company in delivering the affordable, reliable and ever-cleaner energy that enables human progress,” said Wirth.

Wirth stated that he especially thanked Jay Johnson, Jay Pryor and Steve Green for all they’ve done for Chevron, the industry and the company's employees over the course of their careers.

“Each of them exemplifies the finest qualities of character, integrity and excellence, and their influence will be felt for many decades still to come,” stated Wirth. 

QatarEnergy, the world’s No. 2 LNG producer after Australia, is continuing to focus on exploration and production with partner ExxonMobil and both have signed a production sharing contract for one of the few expanding Basins in the West, the East Mediterranean.

Greece, Cyprus and Israel have signed an agreement to build a 1,900-kilometre subsea pipeline to transport natural gas from the East Mediterranean to West European markets in competition to LNG.

Delek Group, the Israeli company developing the Leviathan gas field offshore Israel with Noble Energy of the US, confirmed the start of first gas deliveries in December and ongoing plans for a floating LNG project.

Noble Energy, the US company with stakes in the Leviathan and Tamar natural gas fields in the East Mediterranean offshore Israel, said it had doubled the volumes of its deals for sales to Dolphinus Holdings of Egypt and extended the contract terms.