British oil firm to merge with NewMed in Israel-Egypt gas tie-up

i24NEWS - Reuters

3 min read
Israel's offshore Leviathan gas field in the Mediterranean Sea, on September 29, 2020.
AP Photo/Ariel SchalitIsrael's offshore Leviathan gas field in the Mediterranean Sea, on September 29, 2020.

The first Israeli company to own oil and gas assets in Egypt, which has some 100 million energy-hungry people

Capricorn Energy plans to merge with Israel’s NewMed partnership in an all-share deal after paying a $620 million special dividend to its shareholders, ditching a previous scheme to join Tullow Oil.

A Capricorn-NewMed deal would create an Israel-Egypt-focused gas producer including NewMed’s stake in Israel’s giant Leviathan offshore field, at a time when Europe is looking for non-Russian energy supplies.

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The new group would be listed under NewMed in London and led by Yossi Abu, the chief executive of NewMed.

Shares of the British gas and oil exploration firm Capricorn were trading more than 10 percent after the announcement, hitting their highest level in four years.

Abu said the new group would aim to raise its production to over 200,000 barrels of oil per day by the end of the decade from its current 115,000.

"We are creating a company that for the first time allows international investors to get direct exposure to the EastMed gas play and Leviathan in particular," Abu said.

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It will be the first Israeli company to own oil and gas assets in its neighboring Arab state, Egypt, which has an energy-hungry population of around 100 million.

Israel already supplies gas to Egypt after discovering large resources off its coast in the 2000s.

Abu said the merger better positions NewMed as a potential gas supplier for Europe, adding that the company was still weighing its options for further developing Leviathan.

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