Delek sets sights on bigger stake
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