POLITICIANS here found new grounds to bicker yesterday after news that Houston-based Noble Energy agreed to sell 10 per cent of its stake in Israel’s Leviathan gas project.

Noble announced on Sunday that the partners in the Leviathan Project have agreed in principle on a proposal to sell a 30 per cent working interest in the offshore Leviathan licences to Australia’s Woodside Energy Ltd.

Under the proposal, the Delek Group will sell 15 per cent of the rights in the licences for $1.281 billion, Noble Energy 9.66 per cent of the rights for $802 million, and the remaining partner Ratio, 5 per cent of the rights for $417 million.

The Leviathan project has an estimated 17 trillion cubic feet (tcf) of discovered resources and is currently being appraised.

Under the terms of the deal, Noble said it would receive cash payments totalling $464 million. (€357 million).

In addition, Noble Energy would receive a share of Woodside’s annual LNG revenue above certain price parameters, subject to a $322 million cap over the life of the project. The company would also be carried for up to $16 million in the drilling of a Mesozoic oil exploration well on the Leviathan licenses. Including the potential revenue sharing amounts and drilling carry, the implied price for Noble Energy’s interest being sold is $802 million, the company said.

Woodside joined a group earlier this year that bid on gas exploration rights off Cyprus. Its offer for Block 9 was not picked.

Using Noble’s announcement as ammunition, DISY’s Averof Neophytou took a pot shot at presidential candidate Yiorgos Lillikas on the latter’s proposal to use Cyprus’ natural gas reserves as collateral.

Lillikas has been advocating pre-selling the rights to the Cypriot offshore blocks in a bid to raise cash; in this way, he argues, the island would have no need for a bailout.

Cyprus’ gas reserves are yet to be proved.

Neophytou said the numbers cited by Noble suggest its contract in the Leviathan project is valued at $8.3 billion ($802 million times ten), or €6.4 billion. Given that the gas reserves in Cyprus’ Block 12 prospect are estimated to be about 2.5 times less than Leviathan’s, this would indicate Noble’s interest in Block 12 would be worth around €2.6 billion (€6.4 billion divided by 2.5).

That’s a far cry from Lillikas’ recent claim that Block 12 alone is worth some €80 billion, Neophytou said.

Moreover, pre-selling the rights to gas prospects now would necessarily mean selling at a discounted price, he added.

All this showed how Lillikas’ proposal was unfeasible and unrealistic, Neophytou said, pointing out that the gas reserves would not be enough to avoid a bailout.

Hitting back yesterday, Lillikas’ said his proposal had been endorsed by “independent economists.”

He went on to quote energy chief Solon Kassinis – widely recognised as an authority on the subject – as saying that Cyprus could stand to make as much as €600 billion from all the gas prospects.

“We understand Mr. Neophytou’s anxiety; he is worried lest there could be a different way out other than his beloved memorandum,” a statement issued by Lillikas’ election staff said, referring to the troika bailout.

Lillikas said Neophytou’s boss and rival presidential candidate Nikos Anastasiades “had been blackmailing us into signing the memorandum here and now, even before we knew the terms.”

Published by: www.cyprus-mail.com