Sources: Agreement with the Tax Authority may not be the final hurdle.
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Australian drilling giant Woodside Petroleum Ltd. (ASX: WPL) and the Israel Tax Authority are expected to sign an agreement after Passover on the tax that the company will pay for acquiring 25% of the rights in the Leviathan natural gas field for $2.71 billion. Sources inform ”Globes” that the parties established a rapport in the negotiations after Woodside executives met Tax Authority officials, headed by director general Moshe Asher, this week. Following the meeting, the Woodside VP handling the talks returned to Australia.
Two weeks ago, Woodside, run by CEO Peter Coleman, walked out at the last moment on the signing ceremony for the final farm-out agreement to the rights in Leviathan. The reason for the company’s decision not to sign the agreement was that a number of issues had not been clarified, among them a major dispute with the Tax Authority over accelerated amortization.
The gap between the parties at the time was too wide to be bridged: Woodside wanted to amortize its investment in Leviathan over ten years, while the Tax Authority demanded a 25-year period (its original position was 30 years). Attempts to reach agreement between Woodside and the Tax Authority resumed a few days later, with the encouragement of Prime Minister’s Office director general Harel Locker.
Published by Globes [online], Israel business news – www.globes-online.com