Page 7 - MEOG Week 36 2021

MEOG FINANCE & INVESTMENT MEOG

Mubadala closes in on deal

to acquire Tamar stake

ISRAEL UAE-BASED Mubadala has agreed to buy Delek gas from the $6.30 agreed in 2012 to $3.7-4.4
Drilling’s 22% stake in the Tamar gas field off- per million British thermal units (mmBtu) in
shore Israel for $1.025bn, subject to certain con- an effort to win back the volume of gas they lost
ditions being met. to partners in the Leviathan gas field in a ten-
The agreement follows the signing of a mem- der several months earlier when IEC elected to
orandum of understanding (MoU) between the diversify sources of gas. However, Chevron and
parties in April. Following the sale, the Tamar Delek were opposed to the deal, citing concerns
shareholding will comprise Chevron (opera- about competition between the two fields. The
tor, 25%), Isramco (28.75%), Mubadala (22%), Leviathan consortium is comprised of Delek
Tamar Petroleum (16.75%), Dor Gas (4%) and (45.33%), Chevron (39.66%, operator) and Ratio
Everest (3.5%). Proven reserves in the Tamar Oil Exploration (15%).
lease, after production of more than 69.3bn cubic Chevron, which acquired the assets of Noble
metres, are approximately 300 bcm of natural gas Energy last year in a $5bn takeover, was mired in
and 14mn barrels of condensate. The agreement controversy having been accused of cutting gas
also includes Delek’s 22% stake in the Dalit gas supplies to IEC, though according to Delek CEO
licence. Yossi Abu, no reduction in flows ever took place.
The Tamar field was discovered in 2009 and Following the Tamar divestment, Delek’s
is located 90 km west of Haifa, offshore Israel, at assets will be comprised of the equal stakes in the
an overall depth of 5,000 metres below sea level, giant Leviathan gas field and the East Med Gas
and in waters that are 1,700 metres deep. (EMG) pipeline stakes, as well as 30% in Cyprus’
Production began in 2013, where the natural 3.5 trillion cubic foot (10 bcm) Aphrodite gas
gas in Tamar was extracted through five produc- field and the onshore Israeli New Ofek and New
tion wells. The gas flows through two 140-km Yahel licences. It will also receive royalties from
pipelines to the primary and main processing the Karish and Tanin fields, which were sold to
facility on the Tamar Platform, where most of fellow London-listed Energean in 2016.
the gas processing takes place. The Leviathan partners agreed in January to
The natural gas is then transmitted from spend around $235mn to construct the EMG
the platform through a pipeline to the onshore pipeline allowing for direct gas exports from the
terminal in Ashdod, and into the Israeli market assets to Egypt. The new line will allow the pro-
through the INGL national gas pipeline, with ducers to maintain a base capacity of 5 bcm per
a proportion being exported on to Jordan and year of supply to Egypt following the signing of
Egypt. an eight-year supply deal, with gas flows to kick
Delek has been seeking to move swiftly to off in mid-2022 and early 2023.
complete the sale so it can meet a mid-Decem- Egypt intends to export this gas as well as that
ber deadline for divesting the stake in order to produced from the giant Zohr field, which lies
comply with a controversial antitrust settlement in its own segment of the East Mediterranean.
reached in 2015.
In the April MoU announcement, Delek said Indian exit
that the deal would comprise an unconditional In related news, a consortium led by India’s
payment of $1bn and “a contingent payment of ONGC Videsh Ltd (OVL) this week said that it
up to $100mn which will be paid subject to cer- had relinquished Israel’s offshore Block 32 owing
tain terms and goals being met as shall be agreed to “very poor” hydrocarbon prospectivity.
between the parties”. The block was awarded to the consortium
An agreement was reached in February of OVL, Indian Oil Corp. (IOC), Oil India Ltd
between the Israel Competition Authority and (OIL) and Bharat Petroleum Resources Ltd Source: Delek
the Tamar partners, bringing to an end a dispute (BPRL) in 2018.™
and saving the Israel Electric Corp. (IEC) around
$30.5mn. This allowed Isramco, Tamar Petro-
leum, Dor and Everest to sell gas to IEC sepa-
rately, in accordance with their shareholding in
the project through the final eight months of the
contract to June 2021.
This was followed by reports in local press in
July that IEC was close to agreeing an extension
to the gas supply deal until 2030, but no official
announcement has yet been made.
In September 2019, Isramco and Tamar
agreed to reduce the price the utility pays for its

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