Woodside Terminates Leviathan MoU

Australia’s Woodside terminated the non-binding Memorandum of Understanding signed in February 2014 for a 25% participating interest in two offshore licences in Israeli waters. 

‘Negotiations between the parties failed to reach a commercially acceptable outcome that would have allowed fully-termed agreements to be executed,’ reads a note released by Woodside on Wednesday.

As reported last month, the Woodside-Israeli deal that would have allowed the Australian giant to purchase 25% of the 540 bcm Leviathan field for up to USD 2.7 billion did not close end of March, as expected, due to a tax dispute between Woodside and the Israeli tax authority. 

The partners in the Leviathan project remain Noble Energy (39.66%), Delek Drilling (22.67%), Avner Oil Exploration (22.67%) and Ratio Oil Exploration (15%). 

According to a communiqué published by Delek Drilling, the termination of the MoU has to do with the Phase I of the development program focusing on the Israeli Market. Nonetheless, Israel’s main integrated energy company added that the development of Phase I has achieved some significant progress.

“All parties have worked very hard to secure an outcome which would be commercially acceptable, but after many months of negotiations it is time to acknowledge we will not get there under the current proposal,” Woodside CEO Peter Coleman said. 

In April, US-based Noble Energy said it expects large contracts for its Eastern Mediterranean reserves in the coming quarters, capitalizing on a progressive convergence with Israel.