Woodside nears Leviathan deal
Woodside Petroleum is seen nearing a final deal to enter the Leviathan gas project in Israel.
According to Israeli news service Globes, Woodside is ready to sign an agreement to claim 30 per cent for $US3 billion ($A3.428 billion).
The Australian group first signalled its interest in the offshore development – expected to be one of the world’s largest – when signing a memorandum of understanding with Leviathan owners Ratio Oil & Exploration, Delek Group and Noble Energy just over 12 months ago.
Since then it has sat on the sidelines amid concerns over Israel’s gas export policy and a push from the Leviathan owners to extract more cash from Woodside.
The MOU called for Woodside to pay as much as $US2.3 billion for 30 per cent, which means, depending on how the deal is structured, the Australian firm is likely to be paying an additional $US700 million.
The increase comes after a year in which the Leviathan partners boosted the reserves of the project and there was a favourable export policy decision in the Israeli courts.
It is believed senior management from Ratio, Delek and Noble will visit Australia this week to confirm the deal with Woodside. However, one possible spanner in the works is the capital gains tax policy in Israel, which has reportedly frustrated the JV partners.
The speculation follows quickly on the heels of the first export agreement for Leviathan – a $1.2 billion sales contract with the Palestine Power Generation Company.
The project is expected to be operational in 2017.
According to Israeli news service Globes, Woodside is ready to sign an agreement to claim 30 per cent for $US3 billion ($A3.428 billion).
The Australian group first signalled its interest in the offshore development – expected to be one of the world’s largest – when signing a memorandum of understanding with Leviathan owners Ratio Oil & Exploration, Delek Group and Noble Energy just over 12 months ago.
Since then it has sat on the sidelines amid concerns over Israel’s gas export policy and a push from the Leviathan owners to extract more cash from Woodside.
The MOU called for Woodside to pay as much as $US2.3 billion for 30 per cent, which means, depending on how the deal is structured, the Australian firm is likely to be paying an additional $US700 million.
The increase comes after a year in which the Leviathan partners boosted the reserves of the project and there was a favourable export policy decision in the Israeli courts.
It is believed senior management from Ratio, Delek and Noble will visit Australia this week to confirm the deal with Woodside. However, one possible spanner in the works is the capital gains tax policy in Israel, which has reportedly frustrated the JV partners.
The speculation follows quickly on the heels of the first export agreement for Leviathan – a $1.2 billion sales contract with the Palestine Power Generation Company.
The project is expected to be operational in 2017.
Link to source: http://www.businessspectator.com.au/news/2014/2/3/mergers-acquisitions/woodside-nears-leviathan-deal
