Woodside Leviathan deal stalls

Woodside Petroleum says it has failed to reach definitive agreements with its partners in the Leviathan gas project off the coast of Israel by the joint venture's proposed deadline.

Woodside and its joint venture partners Noble Energy, Delek Drilling, Avner Oil Exploration and Ratio Oil Exploration had entered into a memorandum of understanding and had been aiming to reach fully-termed agreements by March 27. 

However the oil and gas giant told the market this morning it had been unsuccessful in executing definitive agreeements by the target date.

"Discussions continue with the parties and the Israeli government with a view to resolving the remaining issues and executing definitive agreements," the company said.

Woodside last month announced it would take a reduced 25 per cent stake in the massive project, under a conditional deal that involves up-front payments of $US1.2 billion.

The original in-principle agreement, announced in December 2012, envisaged Woodside taking a 30 per cent stake in the project.

The project has faced a number of hurdles, including a legal challenge to the Israeli government’s natural gas export policy. That was dismissed last October by the Israeli High Court, which upheld the government's 50 per cent gas reservation policy.

The Leviathan field holds an estimated 18.9 trillion cubic feet of natural gas and 3.4 million barrels of condensate.

Woodside would be the operator of any liquefied natural gas development, while Noble would remain upstream operator.

The company's shares were trading 15.5 cents higher at $38.585 at 9:15am WST.