The Leviathan-Woodside deal will not be signed this evening. Australian company Woodside Petroleum objects to the formula for taxing exported gas recommended by the Ministry of Finance in draft legislation.
Woodside made its signature on the deal to buy 25% of the rights in the Leviathan gas field conditional on the taxation question being settled to its satisfaction. "Globes" revealed that, in a letter to Minister of Finance Yair Lapid, Woodside demanded that the taxation model should recognize a return on capital of at least 17-19% for the floating gas liquefaction plant that Woodside intends to construct in order to export gas from the Leviathan field to East Asia. In the draft bill published yesterday, however, no norm for return on capital is set. Only the taxation principles are outlined, with implementation of the model left to the Tax Authority's discretion.
The signing ceremony for the deal whereby Woodside will buy 25% of Leviathan for $2.71 billion was due to be held at 19:30 this evening at the King David Hotel in Jerusalem.
Published by Globes [online], Israel business news - www.globes-online.com - on March 27, 2014
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