Canada Has To Cut Oil Production Emissions To Attract Investors – OilPrice.com

Canada Has To Cut Oil Production Emissions To Attract Investors – OilPrice.com

Chevron’s interest in the giant offshore Leviathan gas field in the Mediterranean is the starting point for what ended as a $5-billion acquisition of Noble Energy, Reuters reports, citing a regulatory filing.

The filing reveals that Chevron initially planned to take a 50-percent stake in the Israeli field that Noble Energy is developing in partnership with local Delek. The field’s development will cost billions of dollars, so Noble was on the prowl for a partner to shoulder part of the burden.

But things worsened.

As the oil industry collapsed this year and Noble swung into a loss of as much as $4 billion, the company’s board decided to sell the whole company. To pick the best suitor, Noble invited eight energy companies to share whether they would be interested in its Leviathan stake and then negotiated with six of these. Chevron was the final pick as the rest were eventually determined to be either high-risk or unable to deliver any real benefit to the company.

Chevron said last month that it had entered a definitive agreement to acquire Noble Energy in an all-stock transaction valuing the company at close to $5 billion. Chevron and Noble Energy’s boards unanimously approved the deal, which is expected to close in Q4 2020, subject to the approval of Noble Energy shareholders, regulatory approvals, and other customary closing conditions.

Commenting on the deal, the chief executive of Leviathan partner Delek Drilling said the acquisition could place the gas field on the world energy stage and turn it into a global supplier of LNG. This would be in line with Israel’s plans to gain more clout on international gas markets, but it may take a while given the current oversupply on said markets.

“We don’t have in our group the LNG capabilities,” Yossi Abu said as quoted by Reuters. “Chevron brings a significant LNG capability into the Leviathan project, and I’m sure that they will enhance our capabilities to take Leviathan from local and regional to a global supplier of gas.”

By Charles Kennedy for Oilprice.com

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