Woodside Petroleum Ltd. (WPL.AU) aims to finalize a US$1.2 billion a deal to buy a 30% stake in a big natural gas field in the Mediterranean Sea by June, after talks with Israel were held up by a general election.
Woodside Petroleum Ltd. (WPL.AU)
aims to finalize a US$1.2 billion a deal to buy a 30% stake in a big natural
gas field in the
Mediterranean
Sea
by June, after talks
with
Israel
were held up by a general election.
Woodside Chief Executive Peter Coleman said he hadn't been able to meet with
Israeli lawmakers for some time to discuss the stake purchase in the Leviathan
gas field because of the election campaign in January and subsequent efforts to
form a new coalition government.
Leviathan, which contains an estimated 18 trillion cubic feet of natural gas,
is the world's largest deepwater gas find in a decade. Its discovery with other
large fields off
Israel
's coast in recent years has potentially set up
Israel
as an exporter of energy.
Woodside agreed a deal to acquire the stake in Leviathan in December as it
stepped up a search for overseas assets that could increase its production
within the next five years. Several setbacks in
Australia
have dented its near-term prospects, including a decision to shelve
plans for the Browse liquefied natural gas facility onshore
Western Australia
and a shortage of gas to underpin an expansion of its US$15 billion
Pluto project.
Woodside's partners in the joint venture--Noble Energy Inc. (NBL), Delek Group
Ltd. (DLEKG.TV), Avner Oil Exploration LP (AVNR.L.TV) and Ratio Oil Exploration
(1992) LP (RATI.L.TV)--had expected the deal for the Leviathan stake to be
finalized by February.
Despite the delays due to the election, Mr. Coleman said Woodside aims to
complete the Leviathan deal before the end of the first half of the current
calendar year.
However, investors in Leviathan are still seeking clarity on
Israel
's policy toward gas exports.
Earlier this month, Noble Energy Chief Executive Charles Davidson said
production from Leviathan won't begin until
Israel
sets out export rules dictating how much gas can be sold abroad. A 2012
government commission issued several policy recommendations, including an
export quota, that the government has yet to adopt. Some environmentalists and
local politicians have opposed the recommendations.
"Export options are now being mooted in
Israel
, potentially pipeline options as well as liquefied natural gas options
and we need to consider those," Mr. Coleman told reporters following
Woodside's annual meeting of shareholders.
In an unusual move for an international oil company, Woodside said Tuesday it
will distribute the vast majority of its profits to shareholders in dividends
rather than invest it in exploring for new resources or acquiring oil and
natural gas fields. That prompted analysts at
Macquarie
to
say Woodside is no longer a growth company, but a high-yield investment play
similar to Australian banks.
Mr. Coleman said Woodside retains "headroom" to pursue acquisitions
even though it will return more than US$500 million to shareholders this year
through a special dividend.
He rejected a suggestion that Woodside has prioritized dividends at the expense
of big natural gas projects, such as Browse LNG, which has been shelved for at
least two years on the grounds that a new onshore plant at James Price Point in
Western
Australia
wasn't commercial.
"We are still a growth company," he said, pointing to Woodside's
continued focus on exploration and development activities in
Australia
and overseas.
"Those growth projects are still there--they haven't gone away," he
said, adding that the only thing that has changed is the timing of developments
and the respective capital requirements.
Mr. Coleman said Woodside has some sales contracts from the Pluto and North
West Shelf ventures that it operates in Australia coming up for renewal.
But he didn't see any major softening in LNG demand as buyers anticipate future
supply increases from
North
America
and
East Africa
.
Demand for LNG at the moment is "very strong, particularly for spot
cargoes and we expect that demand to maintain that strength over the next three
or four years," he said.
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