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BG farms into Cyprus block for $165m

UK producer BG has farmed into a 35% interest in Block 12 offshore Cyprus with US producer Noble for $165m cash

BG, which is the object of a takeover deal by Anglo-Dutch major Shell, had long been in talks with asset-holders in the eastern Mediterranean Cyprus as it needs a supply of gas for its under-used liquefaction capacity in Egypt. Its gas production there is going to the domestic market.

Block 12 includes the Aphrodite natural gas discovery which has gross mean resources of some 4 trillion cf. The transaction has an effective date of 1 April 2015, and is expected to close before the end of 2015. Noble Energy will maintain operatorship of Block 12 with 35%.

Noble said the upstream partnership with BG was "an important step in moving the project forward for development. BG brings substantial technical, financial and marketing capacity to the partnership. Their longstanding presence and experience in the region are great complements to our own, and we are confident our combined strengths will enhance the value of Block 12."

Noble is still working with the government of Cyprus to finalize Aphrodite development plans. In conjunction with that work, it has started gas marketing efforts, primarily targeting customers in Egypt, including both domestic purchasers and underutilized liquefied natural gas (LNG) plants.

Noble Energy has also sold its 47% interest in the Alon A and Alon C licenses offshore Israel, which include the Tanin and Karish fields, to the Delek Group for a total deal value of $73mn. The divestment of interest in these assets is an important step in fulfilling Noble Energy's obligations under the recently-approved regulatory framework in Israel and will simplify the ultimate sale of Tanin and Karish to a third party. Completion of both transactions are subject to certain regulatory approvals as well as customary closing conditions and adjustments.

Only two more approvals are needed before Shell can buy BG: Australia's Foreign Investment Review Board and China's ministry of commerce.

 

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