Woodside Petroleum to pay $2.6 bn for 25% stake in Israel's Leviathan gas field

Woodside Petroleum Ltd, Australia's second-largest oil producer, plans to buy a 25-per cent stake in Israel's Leviathan natural gas field from Noble Energy and its partners, for as much as $2.6 billion under a revised agreement.

Perth-based Woodside will pay an initial $850 million when the deal is completed, due by the end of next month.

In December 2013, Woodside said that it would buy a 30-per cent stake in the Leviathan field for $1.25-billion from partners Noble Energy Mediterranean, Delek Drilling, Avner Oil Exploration and Ratio Oil Exploration. (See: Woodside Petroleum strikes $1.25 bn Leviathan LNG deal)

The stake purchase is smaller by 5 per cent negotiated in the December deal, but the transaction price has gone up by as much as $1.3 billion because the estimated size of the resource has since risen to 18.9 trillion cubic feet of gas from 17 trillion cubic feet.

Discovered in 2010, the Leviathan field located in the Mediterranean Sea off the coast of Israel is the country's biggest natural gas field.

It is the world's biggest offshore discovery of the past decade and the partners expect to discover some 600 million barrels of oil beneath the gas.

The gas field is located roughly 130 km west of Haifa in waters 1,500 metres (4,900 ft) deep in the Levantine basin, a rich hydrocarbon area.

As per the December agreement, Woodside would be the operator of any LNG development of the field, while Noble Energy would remain upstream operator.

Woodside CEO, Peter Coleman, said the deal provided a potential commercial outcome with compelling value. ''We look forward to the ongoing engagement with the joint venture, government and other stakeholders to move forward with the Leviathan project.''