* Last-minute snag on profit-sharing with Israel
* Woodside looks to resolve issues and sign deal
(Adds hurdles to deal)
JERUSALEM/MELBOURNE, March 28 Australia's
Woodside Petroleum Ltd has delayed signing a landmark
agreement to take up to a $2.7 billion stake in Israel's
Leviathan gas field, but said on Friday it was in talks to
overcome remaining issues.
The agreement was supposed to be signed on March 27, however
sources have said Woodside was balking at a push by the Israeli
government to cut the potential share of profits Woodside could
take on liquefied natural gas (LNG) exports to Asia.
"Discussions continue with the parties and the Israeli
government with a view to resolving the remaining issues and
executing definitive agreements," Woodside said in a statement
to the Australian stock exchange.
Another potential snag to the deal is an effort by the
Israeli government to halt exports at times of domestic
emergencies, a proposal that could tarnish the appeal of Israeli
gas among potential buyers looking for certainty of supply.
By bringing in Woodside, an LNG specialist, the U.S.-Israeli
group developing the project and its 540 billion cubic meters
(19 trillion cubic feet) of reserves are looking to access a
broad market, particularly Asia.
Woodside tentatively agreed in February to take a 25 percent
stake in the project, owned by Texas-based Noble Energy,
and Avner Oil Exploration, Delek Drilling
and Ratio Oil Exploration.
The deal was first announced in December 2012 but the sides
held off on finalising it until Israeli regulations on exports
and taxation became clear.
The Leviathan discovery in 2010, along with a sizeable find
a year earlier, came as a surprise for Israel, which has always
been dependent on fuel imports.
The government scrambled to update its policies to make sure
the domestic market remained a priority and the state received a
fair share of the revenues without upsetting the companies
involved by cutting too much into their profits.
Last June the government decided that 40 percent of the
country's total reserves could be exported. And just two days
ago a government panel presented its preferred model for taxing
There has been a lot of speculation on how Leviathan will be
developed and where the gas could be sold.
The Israeli partners have said that 16 billion cubic metres
of gas a year will be produced in the first stage, about half of
which will be sent by pipeline to Israel, Jordan and the
Palestinian Authority. The rest will be sold through a separate
pipeline to another neighbor, perhaps Turkey or Egypt.
At the same time, there are more complex plans for LNG
exports with an eye to serving Asian markets. The LNG exports
would be processed onshore at a facility in Cyprus or, more
likely, at sea on a floating LNG vessel.
(Reporting by Ari Rabinovitch and Sonali Paul; Editing by