By STEPHEN BELL
PERTH -- Woodside Petroleum aims to finalize a $1.2 billion
a deal to buy a 30% stake in a big natural gas field in the
Mediterranean Sea by June, after talks with Israel were held up
by a general election.
Woodside CEO Peter Coleman said he hadn't been able to
meet with Israeli lawmakers for some time to discuss the stake
purchase in the Leviathan gas field because of the election
campaign in January and subsequent efforts to form a new
Leviathan, which contains an
estimated 18 trillion cubic feet of natural gas, is the world's
largest deepwater gas find in a decade. Its discovery with
other large fields off Israel's coast in recent years has
potentially set up Israel as an exporter of energy.
Woodside agreed a deal to acquire the stake in Leviathan in
December as it stepped up a search for overseas assets that
could increase its production within the next five years.
Several setbacks in Australia have dented its near-term
prospects, including a decision to shelve plans for the Browse
liquefied natural gas facility onshore Western Australia and a
shortage of gas to underpin an expansion of its $15 billion Pluto
Woodside's partners in the joint venture -- Noble Energy,
Delek Group, Avner Oil Exploration and Ratio Oil Exploration --
had expected the deal for the Leviathan stake to be finalized
Despite the delays due to the election, Mr. Coleman said
Woodside aims to complete the Leviathan deal before the end of
the first half of the current calendar year.
However, investors in Leviathan are still seeking clarity on
Israel's policy toward gas exports.
Earlier this month, Noble Energy CEO Charles Davidson said
production from Leviathan won't begin until Israel sets out
export rules dictating how much gas can be sold abroad. A 2012
government commission issued several policy recommendations, including an
export quota, that the government has yet to adopt. Some environmentalists and local
politicians have opposed the recommendations.
"Export options are now being mooted in Israel, potentially
pipeline options as well as liquefied natural gas options and
we need to consider those," Mr. Coleman told reporters
following Woodside's annual meeting of shareholders.
In an unusual move for an international oil company,
Woodside said Tuesday it will distribute the vast majority of
its profits to shareholders in dividends rather than invest it
in exploring for new resources or acquiring oil and natural gas
fields. That prompted analysts at Macquarie to say Woodside is
no longer a growth company, but a high-yield investment play
similar to Australian banks.
Mr. Coleman said Woodside retains "headroom" to pursue
acquisitions even though it will return more than $500 million
to shareholders this year through a special dividend.
He rejected a suggestion that Woodside has prioritized
dividends at the expense of big natural gas projects, such as Browse LNG, which
has been shelved for at least two years on the grounds that a
new onshore plant at James Price Point in Western Australia
"We are still a growth company," he said, pointing to
Woodside's continued focus on exploration and development
activities in Australia and overseas.
"Those growth projects are still there -- they
haven't gone away," he said, adding that the only thing that
has changed is the timing of developments and the respective
Mr. Coleman said Woodside has some sales contracts from the
Pluto and North West Shelf ventures that it operates in
Australia coming up for renewal.
But he didn't see any major softening in LNG demand as
buyers anticipate future supply increases from North America
and East Africa.
Demand for LNG at the moment is "very strong, particularly
for spot cargoes and we expect that demand to maintain that
strength over the next three or four years," he said.
Dow Jones Newswires