Sources inform ''Globes'' that the bid by Australia's Woodside Petroleum Ltd. (ASX: WPL) for 30% of the rights to the Leviathan licenses is 50% higher than their market value, making it one of the finalists in the licensees' choice for a strategic partner. Woodside's bid reflects a value of $7.5 billion, compared with analysts' estimates of $4.7-5.5 billion for the gas field. Woodside's bid is complicated and subject to various conditions which could lower the final bid.
Noble Energy Inc. (NYSE: NBL) owns 39.66% of Leviathan, Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 22.67% and Ratio Oil Exploration (1992) LP (TASE:RATI.L) owns 15%.
Yesterday, "The Australian" reported that Woodside Petroleum CEO Peter Coleman was going to Burma, after acquiring a stake in an offshore gas discovery there, and that this "coincides with increasing speculation that Woodside is also looking at taking an interest in the giant Leviathan gas field off the coast of Israel."
Woodside Petroleum already partners with Delek and two Italian companies, Enel SpA (BIT: ENEL) and Edison SpA (BIT: EDN), to bid for an offshore exploration block in Cypriot oil and gas exploration licenses.
Sources also told "Globes" that the year-long process for finding a partner for Leviathan is due to end within two or three weeks. Last week, "Globes" reported that Gazprom JSC (RTS: GAZP; LSE: GAZD; DAX: GAZ) was a leading contender in the process. "Petroleum Intelligence Weekly" reported that, in addition to Gazprom, an Australian company (Woodside) and a South Korean company, apparently Korea Gas Corporation (Kogas) (KRX: 36460), are finalists in the Leviathan process.
Noble Energy prefers a Western partner for Leviathan, rather than Gazprom. Woodside would fit the bill for Noble Energy: it is a veteran company with deepwater expertise as well as building liquefied natural gas (LNG) facilities for gas exports from its fields off Australia's northwest coast. This area is considered the most developed in the world, attracting hundreds of billions of dollars in investment in onshore and floating LNG facilities.
The Leviathan field, discovered in 2010, has an estimated 17 trillion cubic feet (TCF) of gas, making the biggest deepwater gas discover of the past ten years. 50-75% of the gas is slated for export, assuming that Israeli government adopts the Tzemach Committee recommendations. Energy sources believe that the current government will adopt the recommendations in full before its term ends.
Published by Globes [online], Israel business news - www.globes-online.com - on October 21, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012