Woodside set to buy Leviathan stake

AUSTRALIA’S Woodside Petroleum is reportedly on the cusp of signing a US$3 billion deal for a 30 per cent stake in the Leviathan offshore gas field in Israel. Israeli business newspaper Globes reported senior managers of field
operator Noble Energy and major stakeholders Delek Group and Ratio Oil Exploration were due to fly to Australia in February to sign off on the deal. It did not reveal its sources.
While Leviathan is yet to be approved for development, the field is estimated to have reserves of about 538 billion cubic metres of gas.
The sale figure is more than double the original non-binding deal signed by Woodside in December 2012, under which the company would have paid US$1.25 billion for a 30 per cent stake.
Since then partners in the field have turned their focus to piping gas from the field to regional buyers like Turkey, rather than relying on Woodside to ship LNG internationally.
The option may have raised the total value of the field and brought on the price hike for Woodside.
News of the deal also comes after the Leviathan partners signed their first export deal for the project in January.
The Palestine Power Generation Company signed a US$1.2 billion agreement to buy about 4.75 bcm of gas from the field across a 20 year period.
Woodside chief executive Peter Coleman last year called Leviathan a “once-in-a-decade” opportunity for the company.
“It is one of the largest recent gas discoveries worldwide, ideally located to produce gas for Israel’s domestic market and export to Asia, Europe and neighbouring pipeline customers,” he said.
Mr Coleman later admitted the deal was taking “longer than expected”.
Globes reported issues surrounding taxation were delaying the process, with Leviathan partners seeking a deferment of capital gains tax payments on the deal from the Israel Tax Authority.