Noble Energy Reduces its Activity in Israel

US Noble Energy, the operator of the two Israeli off shore gas fields, Leviathan and Tamar, is not going to invest further in the Israeli energy sector in the short to medium term, its partner has said.

In a March 19 filing to the Tel Aviv Stock Exchange (TASE) Delek Drilling said Noble had given up its rights in another asset, Alon D/367 to a third party without any consideration. Noble had been the operator with a 47.06% stake.

Delek Drilling, holder of the other 52.94%, brought in its wholly-owned subsidiary Ithaca Energy to become the operator, in a deal requiring regulatory approval. The alternative would have been to lose the licence. Delek Drilling itself is planning to split in two, one part retaining the Tamar stake and a special purpose vehicle will be set up to hold its stakes in the Leviathan and Cypriot Aphrodite fields.

The Noble development happens at a sensitive time as the energy minister, Yuval Steinitz, is trying to lure new investors and at least one international oil company to bid in the current offshore licensing round. The previous round which ended last year was a complete failure. The withdrawal of Noble Energy, with an enviable record in Israel's energy sector is not a good omen.

But Steinitz attended the Cera Week conference in Houston to meet executives and according to media reports the US major ExxonMobil bought documents for the round. ExxonMobil and Qatar have found gas off Cyprus alhough so far no majors have invested in Israel's upstream.

Noble Energy invested heavily in Israel in recent years – its most profitable theatre of activity – putting about a quarter of its capital expenditure into the development of Leviathan. The field is scheduled to come online by the end of the year. Next year Noble might sell down its stake but as operator it must hold at least a quarter, meaning it can sell up to a 15% stake.