TEL AVIV/PERTH (Reuters) - Australia’s Woodside Petroleum (WPL.AX) has submitted a bid to buy a share of Leviathan, a huge natural gas find off Israel’s Mediterranean shores, in another move that will expand its reach outside of Australia.
The partners in Leviathan said in a statement on Monday the bid from Woodside was part of a strategic process announced last month to find an international partner for up to 30 percent of the rights to Leviathan.
Woodside confirmed on Tuesday that it is in the early phase of a competitive bidding process with the licence holders of the 349-Rachel and 350-Amit Israeli offshore petroleum licences, but said speculation about price and commercial terms is premature.
Israeli Prime Minister Benjamin Netanyahu hosted Peter Coleman, CEO and managing director of Woodside, for talks on Monday, Netanyahu’s office said in a statement.
“The natural gas is a strategic asset for the future of the State of Israel’s economy,” it quoted Netanyahu as saying.
According to the Globes financial newspaper, Woodside’s bid for 30 percent of the rights to Leviathan’s licences reflects a $7.5 billion value for Leviathan, making it one of the finalists in the licensees’ hunt for a strategic partner.
The bid for a stake in the Leviathan gas field is part of shift in Woodside’s growth strategy, led by Chief Executive Peter Coleman who took the helm last year, to expand its base outside of Australia.
Last week, Woodside announced that it has agreed to explore for oil and gas in Myanmar with South Korea’s Daewoo International Corp (047050.KS).
In May, Woodside was one of 15 companies, including majors such as Total (TOTF.PA), to bid on nine offshore gas blocks in Cyprus.
Woodside’s shift to a more international portfolio comes as Australian oil and gas developments struggle to keep costs under control, with the company’s own flagship liquefied natural gas (LNG) project coming in $940 billion over budget.
The Leviathan field has an estimated 17 trillion cubic feet of gas, making it the largest deepwater natural gas find of the past decade.
Texas-based Noble Energy (NBL.N) has a 39.66 percent share in the field. Israel’s Delek Group (DLEKG.TA), through subsidiaries Delek Drilling (DEDRp.TA) and Avner Oil Exploration AVNRp.TA, has a 45.34 percent stake. Ratio Oil Exploration (RATIp.TA) holds the remaining 15 percent.
The group has said it is looking to bring in other stakeholders and raise cash to help develop the project, which is expected to begin production in 2017.
Globes said the process for finding a partner for Leviathan is due to end within three weeks. The newspaper had reported last week that Russia’s Gazprom (GAZP.MM) was a leading contender in the process.
Reporting by Tova Cohen in TEL AVIV and Rebekah Kebede in PERTH; editing by Jason Neely and Miral Fahmy