Woodside CEO Peter Coleman met with Prime Minister Benjamin Netanyahu on Monday, as the Australian energy group formally entered the stakes for a piece of the Leviathan gas field.
Coleman detailed Woodside's proposal to liquefy the gas produced at Leviathan and to market it to Asian and European customers. Executives expressed an interest in deepening the company's cooperation with Israel by, among other things, establishing an academic institution devoted to petroleum engineering.
The meeting was one of a series Coleman is holding with officials, including Deputy Foreign Minister Danny Ayalon and Energy Minister Uzi Landau, following the announcement by the existing Leviathan partners - which include America's Noble Energy, the Delek Group and Ratio Energy - confirming newspaper reports that Woodside was interested in acquiring a 30% stake in the field.
The news was greeted warmly on the Tel Aviv Stock Exchange, where shares of the Leviathan partners rallied. Delek Drilling and Avner, two units of the Delek Group, closed 5.5% higher, while Ratio advanced 7.2%.
News reports had been leaked as early as September that the Australian company would vie for the stakes, with sources noting that Woodside was collaborating with Delek in bidding for Cypriot gas licenses.
Netanyahu at the beginning of the year urged Australian companies to enter the Israeli energy market.
But investors were cheered on Monday by unconfirmed reports that Woodside would invest in the field at a $7 billion valuation, a figure that considerably exceeds the $4 billion to $5 billion previously estimated for the license.
Coleman, who took over as CEO last May, has said he wants to expand Woodside's offshore operations, which currently include two projects valued at $1 billion in Australian waters. Coleman was in Burma recently to sign Woodside onto gas projects there.
Woodside specializes in liquefaction of natural gas, or LNG. Thus its proposal differs greatly from those of its two reported rivals for the Leviathan stake - France's Total and Russia's Gazprom. They are both proposing to build an undersea pipeline to Europe.
Trends in the gas market favor Woodside; intense competition in Europe has lowered the cost of natural gas to less than in Asia. Against that, it costs more to liquefy gas and transport it to distant markets.
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