Delek sets sights on big­ger stake

Financial Mirror (Cyprus) - - FRONT PAGE -

Is­rael’s Delek Group is of­fer­ing Hous­ton­based Noble En­ergy $155 mln to ac­quire an ad­di­tional 19.9% stake in the Block 12 li­cense, boost­ing its hold­ing from the cur­rent 30% to 49.9%.

Delek said in a state­ment on the Tel Aviv Stock Ex­change that ne­go­ti­a­tions are in the ini­tial stages, and there is no cer­tainty that they will ma­ture into any bind­ing agree­ment.

As it stands, Noble En­ergy is the op­er­a­tor of Block 12 with 70% in­ter­est. Part­ners Delek Drilling and Avner Oil Ex­plo­ration, both Delek Group sub­sidiaries, each hold 15%.

“We are in pre­lim­i­nary and non­bind­ing dis­cus­sions with Delek and other par­ties about ac­quir­ing work­ing in­ter­est in our Block 12 li­cense hold­ings. Those dis­cus­sions are con­tin­u­ing, and we have not fi­nalised any agree­ment with any party, in­clud­ing Delek,” Noble said in a state­ment.

En­ergy Min­is­ter Gior­gos Lakkotrypis, who has been co­or­di­nat­ing all ex­plo­ration prospects, called it a pos­i­tive devel­op­ment.

It in­di­cated in­ter­est in in­vest­ment in the project, at a time when fuel and gas prices were now start­ing to fall, he added.

At the be­gin­ning of this year, Noble was in talks with of­fi­cials in Cyprus over how to de­velop the 4.54 tcf gas reser­voir Aphrodite, af­ter neigh­bour­ing op­er­a­tors ENI-Kogas and France’s To­tal failed to find sig­nif­i­cant dis­cov­er­ies that would jus­tify their ex­plo­ration plans. Cyprus has also stepped back from ini­tial plans to build an on­shore nat­u­ral gas liq­ue­fac­tion plant, as the Noble’s reser­voirs alone would not sus­tain such a plant. Talks are un­der­way with Egyptian plant op­er­a­tors to pipe Aphrodite’s gas out­put once it comes on stream.

In May 2014, Noble re­ceived ap­proval for a two-year re­newal for its Cyprus project, set­ting the ex­pi­ra­tion date for May 2016, buy­ing enough time to eval­u­ate devel­op­ment sce­nar­ios for Block 12.

Fail­ure to ex­e­cute suc­cess­ful devel­op­ment sce­nar­ios for Block 12 in the Cyprus Ex­clu­sive Eco­nomic Zone and the ad­ja­cent Leviathan within Is­rael’s EEZ could re­duce Noble’s fu­ture growth and have neg­a­tive ef­fects on its op­er­at­ing re­sults, the com­pany said re­cently in its an­nual re­port. In Fe­bru­ary 2015, Noble suspended fur­ther in­vest­ments in the ex­pan­sion of Ta­mar, and ini­tial devel­op­ment of Leviathan un­til reg­u­la­tory is­sues were re­solved with the Is­raeli gov­ern­ment.

Leviathan is Noble’s largest ex­plo­ration dis­cov­ery in its his­tory with an es­ti­mated 19 tcf of gross nat­u­ral gas re­sources, rep­re­sent­ing the largest deep­wa­ter nat­u­ral gas dis­cov­ery in the world in over a decade. Noble had an­tic­i­pated that the first phase of devel­op­ment at Leviathan to be ap­proved in 2014.

As of 2013 when Ta­mar went into pro­duc­tion, es­ti­mated to con­tain gross mean re­sources of 10 nat­u­ral gas which was first dis­cov­ered in 2009.

Noble op­er­ates Leviathan with a 39.67% in­ter­est. Its part­ners in­clude Delek Drilling (22.67%), Avner (22.67%), and Ra­tio Oil Ex­plo­ration (15%).

Noble also op­er­ates Ta­mar with 36%. Its part­ners in­clude Is­ramco Negev 2 LP (28.75%), Delek Drilling (15.625%), Avner (15.625%) and Dor Gas Ex­plo­ration (4%). it was tcf of

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