Woodside CEO confident of closing Leviathan deal

At a press conference in Houston, Peter Coleman said that the Leviathan project did not break Israeli law.

Woodside Petroleum Ltd. (ASX: WPL) CEO Peter Coleman said yesterday that he was confident of closing the deal to acquire 30% of the Leviathan reservoir. Speaking at the IHS CERA Week 2013 in Houston, he added that the Leviathan project did not break Israeli law.

Coleman is quoted by the "Australian Financial Review" website as saying that he had been advised that a reported intention on the part of Antitrust Authority director David Gilo to consider ordering Noble Energy Inc. (NYSE: NBL) and Delek Group Ltd. (TASE: DLEKG) to sell their stakes in the Leviathan field on the grounds that they are a cartel, a move that might frustrate the deal with Woodside, goes a little further than our understanding of what the law says, and that Woodsides understanding was that the law just looks at transparency of pricing and the contractual arrangements that are in place. We are meeting with the partners while we are here in Houston this week and well be able to get a much better read on it, Coleman said.

The "Financial Review" also quotes Coleman as saying that Israel was going through a learning process like other countries developing major hydrocarbon projects for the first time as it put in place fiscal, environmental and other regulatory terms, but that the country was very focused on development and growth.

In early December 2012, Australia's Woodside announced that it would acquire 30% of the rights in Leviathan for $2.5 billion. The parties have exchanged letters of intent on the terms of a deal ahead of the final signing, which was due in late February. The deal reflected a value of $8.3 billion for Leviathan.

In Woodside's financial statements, Coleman said, "We are working to close the Leviathan deal. This year, we will make the final decision about an investment in the Leviathan project." He was referring to the liquefied natural gas (LNG) facility, which will require an investment of billions of dollars. Woodside CFO Lawrie Tremaine said that the company was maintaining $4.1 billion of available funds in the form of cash and undrawn debt facilities for investment in Leviathan and other reservoirs.

Woodside believes that the Israeli government will allow the export of up to 80% of the Leviathan natural gas field. In a presentation yesterday, the company said that Leviathan would initially be developed to meet Israel's domestic needs, after which exports would be made via an LNG facility. 20-25% of Leviathan's gas will be designated for the domestic market.

Woodside said that it planned to invest $1.12 billion in developing Leviathan, the company's largest capital investment in 2013.

Published by Globes [online], Israel business news - - on March 7, 2013

Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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