Sources inform ''Globes'' that Australia's Woodside Petroleum Ltd. (ASX: WPL) is interested in acquiring rights to the Neta and Roy licenses, which are controlled by Ratio Oil Exploration (1992) LP (TASE:RATI.L). There are reportedly initial feelers between the companies.
Woodside executives arrived in Israel last week, and met with government officials to discuss aspects of natural gas exports. Sources close to Woodside said that an investment in Neta and Roy did not come up in these talks. Ratio declined to comment.
Ratio owns 60% of the licenses, Israel Opportunity Energy Resources LP (TASE: ISOP.L) owns 20%, and Italy's Edison SpA (BIT: EDN), a subsidiary of Electricité de France SA (Euronext: EDF). The area of the original Gal permit was reduced, after it was discovered that it extended into Egypt's exclusive economic zone (EEZ), and the remaining area, located within Israel's EEZ, was split into two licenses, Neta and Roy, and indication of the presence of more than one oil or gas-bearing prospect.
The amount of natural gas at the prospectuses has previously been estimated at three trillion cubic feet (TCF). If oil is discovered at Leviathan, which is in the same area, there is a reasonable probability that oil will also be found at Neta and Roy.
Leviathan on the table
A major question about Woodside's activity in Israel is related to the Leviathan deal. The sources said that the heads of Leviathan partners Noble Energy Inc. (NYSE: NBL), Delek Group Ltd. (TASE: DLEKG), and Ratio are due to meet the Woodside executives in a few days to decide the fate of the Woodside's investment in Leviathan. In December 2012, the parties signed a memorandum of understanding, under which Woodside would acquire 30% of Leviathan for $1.25 billion.
Closing the deal has been delayed because of Delek's demand that Woodside substantially improve its offer. At the meetings in Israel, Woodside representatives complained that Delek executives have avoided them for six months. Noble Energy and Ratio want to sign a final deal with Woodside, which will include a price adjustment to reflect the larger amount of gas estimated at Leviathan since the memorandum was signed, and to take the option of gas exports to Turkey into account.
However, Delek Group says that gas exports via pipeline to Turkey makes Woodside unnecessary, as there would be no need for shipment by liquefied natural gas (LNG), Woodside's specialty.
Published by Globes [online], Israel business news - www.globes-online.com - on November 10, 2013
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