Australia's Woodside Buys $1.3 Billion Stake in Leviathan
Australia's major oil and gas producer has taken a giant step with a US$1.3 billion (€995 million) stake in the Leviathan gas field.
The company, Woodside, said in a statement that it had agreed "in principle" to the deal and looked forward to participation in the creation of a liquefied natural gas (LNG) market in Israel.
Leviathan is situated under the Mediterranean off the coast of Israel, and was discovered only two years ago. Deposits lie at a depth of nearly 2,000 metres, and are estimated to contain about 17 trillion cubic feet (tcf) of recoverable gas.
Woodside will buy 30% in the offshore field, joining a venture, managed by Noble Energy of Texas, that expects to give the go-ahead next year for a domestic gas project in Israel. Reuters reports there will be an upfront payment of $696 million to the operators. The field is being developed by a US-Israeli consortium.
The Financial Times observes that the eastern Mediterranean has become a hotspot of the global oil industry following the discovery of Leviathan and the neighbouring Tamar field. The US Geological Survey estimates the subsea area that runs from Egypt north to Turkey – known as the Levantine Basin – contains more than 120 tcf of natural gas and 1.7bn barrels of oil.
News agencies said the deal ended a bidding war for a slice of the Israeli field. The Australian Financial Review pointed to some uncertainties for Woodside, including the geopolitical dimension.
Woodside chief executive Peter Coleman has been keen to broaden the company’s portfolio of assets away from its focus on Australia, and in October it announced a venture in Burma with South Korea's Daewoo International.