Israel risks delay in becoming big gas exporter due to tax dispute

A tax dispute between Israel and Australia's Woodside Petroleum (WOPEF, WOPEY) threatens to delay gas production from the giant Leviathan field, while the government is also forcing oil firms to spend more on pipelines than they expected.

In the tax dispute, the government wants to depreciate Woodside's initial $1.2B investment over the 30-year lifespan of the Leviathan field, while the company argues for a shorter 10-year term, and a shorter depreciation period shields more of Woodside's investment from tax.

At the same time that tax issues delay the entry of a critical partner, the government secured pledges from the four Leviathan stakeholders - Noble Energy (NBL), Delek Drilling (DKDRF), Avner (AVOGF) and Ratio Oil for the construction of 12B cm of pipeline capacity from Leviathan to Israel.

The squeeze could push the project $1B or more over budget, a source tells Reuters.

Comments (2)
  • User 353732
    , contributor
    Comments (5161) | Send Message
    Israel has a rather brief window of opportunity to become a significant exporter of natural gas to Europe, thus greatly enhancing its economic and geo strategic positions.
    Unfortunately, in its greed and incompetence the Israeli Government is acting as typical ME country
    3 Apr 2014, 01:43 PM Reply Like
  • JB204zz
    , contributor
    Comments (92) | Send Message
    I too own Noble for a long-term hold. They have significant domestic and international assets and are not a one-trip US fracking pony, while not being bogged down like the dinosaur majors who are seeking to replace there dwindling large reserves (which fracking doesn't do; so you have to be somewhat nimble and maintain low overhead). Noble may be the model for future diverse energy production.
    6 Apr 2014, 01:41 PM Reply Like
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