Australia-based Woodside Petroleum has signed an in-principle agreement with the Leviathan Joint Venture, to acquire a 30% participating interest in the Leviathan field offshore of Israel in consideration for an initial payment of $696m.
Under the terms of the agreement, Woodside will acquire a participating stake in the 349/Rachel and 350/Amit petroleum licences in the largest natural gas field in Israel.
This transaction is subject to execution of fully termed agreements, due diligence and necessary government and regulatory approvals.
Located at a water depth of 5,550 feet, the Leviathan field contains about 17 trillion cubic feet of recoverable natural gas. Other companies participating in the project include Noble Energy Mediterranean, Delek Drilling, Avner Oil Exploration and Ratio Oil Exploration.
While Noble Energy will continue as the upstream operator, Woodside will be offered the operatorship for development of any liquefied natural gas (LNG) in the fields.
Woodside will also be allowed to participate in further exploration opportunities in the Leviathan licences.
Woodside CEO Peter Coleman said the development was an important step in the company’s ambition for world-class growth opportunities.
"We have a proven track record of safe and reliable operations in Australia and being selected as the Leviathan Joint Venture’s preferred partner in a competitive bidding process demonstrates the value of our LNG development capabilities," Coleman added.
As per a finding from the Interministerial Gas Policy Committee (Tzemach), about 25-50% of gas produced from the Leviathan field would be used to meet growing the demand for gas in Israel.
Assessment of pre-FEED (front end engineering design) is in progress, with initial production likely to commence in 2016.
Image: Woodside Petroleum to acquire 30% participating interest in the Leviathan field offshore of Israel. Photo courtesy of Woodside Petroleum.