An independent committee evaluating BP and Abu Dhabi National Oil Co.’s roughly $2 billion offer for 50% of NewMed Energy has requested the oil and gas giants substantially increase their bid, people with knowledge of the matter said.
Pressure has been growing on the Cypriot government to increase local benefits, particularly given high electricity prices.
It will increase the throughput of gas from 1.2 billion cubic feet per day to nearly 1.4 bcf per day, or from 12 billion cubic metres per year to 14 bcm. The new gathering pipeline should reach first gas in the second half of 2025.
BP said the offer was in line with its "stated strategy and financial frame including current guidance for capital expenditure".
“The cost of getting things done is astronomically higher for oil and gas than for the greener projects,” he said. “In the longer term it’s bullish for prices, as not enough investment is going into the areas where it should be.”
The Israeli company has also talked about building a third gathering line at Leviathan, with a final investment decision (FID) due early this year.
Palliser has suggested that Capricorn should return at least $535 million to shareholders.
However, the company said in closing, it would “continue to consider its alternative strategic options, with the objective of maximising value for its unitholders”.
Smith noted the opposition from shareholders to the Tullow merger. “The message from shareholders was that there was a preference for cash returns over long-term delivery. We listened to that and [the NewMed deal] offers a lot of cashback, while also being energy transition led.”
Capricorn noted that it had been working on “strategic alternatives” for more than a year. However, there have been no better options, it reported, and a sale is necessary to “maximise shareholder value and the full potential of Capricorn’s assets”.
NewMed Energy has signed up with Morocco to explore an area in the disputed Western Sahara.
An activist investor seeking to halt Capricorn Energy Plc’s (LON: CNE) takeover by NewMed Energy LP has converted its holdings to common shares, according to people familiar with the matter.
NewMed Energy has signed a non-binding memorandum of understanding (MoU) to supply natural gas, and develop blue hydrogen, for delivery into Europe with Uniper.
Palliser Capital has joined criticism of Capricorn Energy’s proposed merger with NewMed Energy, saying it undervalues the Egypt-focused producer.
Capricorn Energy should abandon its proposed merger with NewMed Energy and opt instead to liquidate its assets, a shareholder has said.
Chevron and partners have signed up to develop the Aphrodite field, offshore Cyprus, with drilling due to start in the first half of 2023, while political talks are continuing.
Chevron and partners are keen to increase gas exports to Israel’s neighbours and have made a bid to secure all capacity in a proposed pipeline to Egypt.
NewMed Energy has struck a memorandum of understanding (MoU) with Enlight Renewable Energy on developing projects in the Middle East and North Africa.
Delek Drilling is relaunching as NewMed Energy as the company expands into new areas, such as blue hydrogen and renewable power.