US-Israeli group looking to sell stake in massive gas field

Leviathan find of 17 trillion cubic feet of natural gas in 2010 was one of the biggest offshore discoveries in a decade

An offshore drilling rig. (illustrative photo: CC BY-SA Ken Lund, Flickr)
An offshore drilling rig. (illustrative photo: CC BY-SA Ken Lund, Flickr)

A US-Israeli consortium is considering selling up to 30 percent of the huge Leviathan natural gas field off the coast of Israel.

The field — considered the country’s largest fuel reserve — is located about 80 miles (130 kilometers) off Israel’s coastline. It contains 17 trillion cubic feet of natural gas. Its discovery in 2010 was one of the world’s biggest offshore discoveries in a decade.

The partnership in charge of exploration, Houston-based Noble Energy and Israeli partners Delek Drilling and Avner Oil & Gas Exploration, also hopes to find some 600 million barrels of oil beneath the gas.

The consortium said it received letters from “leading international companies” in an announcement to the Tel Aviv Stock Exchange, according to Reuters. The partners, who are seeking strategic partners to help finance the continued development of the gas field, are studying the offers and looking into starting negotiations.

HSBC has been hired to sell the 30% stake, according to Nasdaq.

In May, the group had to stop drilling due to technical difficulties after it reached 21,400 feet — the deepest-known penetration in the eastern Mediterranean Sea. With a higher cash flow, the project can be expected to begin producing gas in 2017.

Leviathan’s discovery raised political tension between Israel and Lebanon because it is near the disputed borderline between the countries’ territorial waters.

According to the US Geological Survey, the subsea area, or the Levantine Basin, that runs northward from Egypt to Turkey contains more than 120 trillion cubic feet of natural gas — and Israeli waters accounts for some 40% of that total. If the reserves are confirmed through discoveries, Israel, a country that currently imports all its fuel, stands to profit very handsomely.

Noble Energy has a 39.66% share in the Leviathan gas field. Israel’s Delek Group has a 45.34% stake. Ratio Oil Exploration holds the remaining 15%.

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