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 coalition government.
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 by February.
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 wasn't commercial.
"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