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Woodside confirms stalled talks in Israeli JV

Woodside confirms stalled talks in Israeli JV

Photo by Bloomberg

28th March 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Australian oil and gas producer Woodside on Friday confirmed that its Leviathan joint venture, in Israel, had stalled.

In February, Woodside signed a memorandum of understanding (MoU) with the joint venture (JV) participants of the Leviathan project for a 25% shareholding in the project.

Woodside would pay $850-million for its stake in Leviathan, with a further $350-million payable on a final investment decision for a liquefied natural gas development, or payments of up to $350-million on predetermined export project milestones.

A payment of 5.75% of Woodside’s well head export gas revenue would also be required - starting after at least two-trillion cubic feet had been exported from the Leviathan field - and was capped at $1.3-billion.

Woodside told shareholders on Friday that the parties had not executed a definitive agreement by the targeted date of March 27, adding that discussions were continuing with the parties and the Israeli government with a view to resolving the remaining issues and executing a definitive agreement.

While Woodside did not disclose the reasons for the stalled discussions, media outlets have speculated that it could be tax related. Israeli news service Globes reported that Woodside was currently weighing a draft ruling on taxing gas exports from Israel.

The MoU was converted from a previous in-principle agreement for the potential acquisition of a stake in the Israeli project, which has an estimated 2C contingent resource of 18.9-trillion cubic feet of natural gas and 34.1-million barrels of condensate.

Edited by Mariaan Webb
Creamer Media Contract Publishing Editor

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