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Energy Ministry’s Petroleum Council backs Noble Energy-Chevron merger

Despite environmental campaign against Chevron’s entry to Israel, energy minister says US conglomerate’s bid to buy in is a ‘huge expression of confidence in our energy economy’

Sue Surkes is The Times of Israel's environment reporter.

An aerial view of the Israeli 'Tamar' gas processing rig 24 kilometers off the Israeli southern coast of Ashkelon. Noble Energy and Delek are the main partners in the oil field, October 11, 2013. (Moshe Shai/FLASH90)
An aerial view of the Israeli 'Tamar' gas processing rig 24 kilometers off the Israeli southern coast of Ashkelon. Noble Energy and Delek are the main partners in the oil field, October 11, 2013. (Moshe Shai/FLASH90)

The Energy Ministry’s Petroleum Council on Monday recommended approving  the merger of Texas-based Noble Energy, which operates two gas fields off Israel’s coast, with the American oil and gas conglomerate Chevron.

The recommendation came despite the fact that shareholders have not yet voted on the proposed deal, announced in July, whereby Chevron Corporation will buy all of Noble Energy’s outstanding shares in an all-stock transaction valued at $5 billion, or $10.38 per share.

According to NASDAQ, the total value of the transaction is estimated at $13 billion, which also includes the price of $8 billion in debt.

Nor does the recommendation reflect last week’s publication of moves by activist investor Elliott Management Corp. to buy a stake in Noble Energy in a reported bid to get the latter to abandon its plans to merge with Chevron.

An Energy Ministry spokeswoman said that the council does not deal with companies competing for the takeover. Its role is to examine whether Chevron would be capable of operating the facilities currently managed by Noble before taking an in-principle decision on transferring the rights in line with Noble Energy’s request.

Energy Minister Yuval Steinitz at the Knesset Interior and Environmental Protection Committee, July 22, 2020. (Adina Velman, Knesset spokes)

“Chevron is one of the largest energy companies in the world… which operates in about 180 countries, such as the United Kingdom, Australia, the Netherlands and Canada,” Energy Minister Yuval Steinitz said.

“From the development of infrastructure and technology, investment in startup companies and research, to the expansion of natural gas exports to other countries and the opening of the market to other large energy companies, I see Chevron’s entry into the country as a huge expression of confidence in our energy economy and another step toward turning the State of Israel into an energy power,” he said.

Five days ago, the Knesset Internal Affairs and Environment Committee heard that Chevron had left a trail of environmental and humanitarian disaster around the world, with 65 cases of litigation against the company in just 31 countries surveyed.

Steinitz has declared that it is “not necessary” to investigate oil spills linked to Chevron before the multinational buys Noble Energy.

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