Representatives of Australia's Woodside Petroleum Ltd. (ASX: WPL) will soon arrive in Israel to move forward on the acquisition of 30% of the Leviathan field for $1.25 billion. The representatives may arrive this week.
"Globes" recently reported that the negotiations on the deal would be reopened, after the High Court of Justice approved the government decision to export 40% of Israeli natural gas. This means that gas from Leviathan will be exported.
Energy market sources believe that Leviathan's Israeli partners - Delek Group Ltd. (TASE: DLEKG) and Ratio Oil Exploration (1992) LP (TASE:RATI.L) - will demand a much higher price from Woodside's original offer for the rights to the gas field, otherwise the deal might fall apart. The main arguments behind the demand are the increase in Leviathan's potential reserves from 16 trillion cubic feet (TCF) to at least 19 TCF, the much higher chances of finding large quantities of oil, and rising competition from Turkish companies interested in buying the gas.
Noble Energy Inc. (NYSE: NBL) owns 39.66% of Leviathan, Delek Group units Avner Oil and Gas LP (TASE: AVNR.L) and DD) each own 22.67% and Ratio owns 15%.
In a separate development, Turkish conglomerate Zorlu is in talks to buy natural gas from Leviathan. Zorlu Energy CEO Ibrahim Sinan Ak, said for the first time on Friday, that the company was interested in buying 3 billion cubic meters of natural gas a year from the Israeli gas field under a 15-year contract.
Published by Globes [online], Israel business news - www.globes-online.com - on November 3, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013