Israel’s Delek group closing in on $2 billion deal for Chevron’s North Sea oilfields

The acquisition would mark another step for Israeli company Delek towards its expected public listing.

By Israel Hayom via JNS

Israel’s Delek group, controlled by Yitzhak Tshuva, is close to clinching Chevron’s oil and gas fields in the British North Sea, which have a price tag of around $2 billion, sources familiar with the matter told Reuters.

Delek, via its North Sea oil and gas operator Ithaca Energy, could reach an agreement within days, two of five sources said.

U.S. oil major Chevron Corp kicked off the sale of its central North Sea oil and gas fields Alba, Alder, Captain, Elgin/Franklin, Erskine and Jade, as well as the Britannia platform and its satellites last July, with the help of U.S. investment bank Morgan Stanley.

One of the sources said that Delek would pay between $1.8 and $2 billion for the assets, which exclude Chevron’s 19.4 percent stake in the BP-operated Clair field.

The Israeli company beat competitors including a consortium formed by Britain’s Premier Oil and U.S. private equity fund Apollo Global Management and also British petrochemical maker Ineos Group, the sources said. It hired JP Morgan and BNP Paribas as advisers to the acquisition.

The acquisition would mark another step for Delek towards its expected public listing, the sources said. The company earlier this month acquired Shell’s 22.45 percent stake in the Caesar-Tonga field in the U.S. Gulf of Mexico for $965 million.

Chevron and Delek declined to comment.

Ithaca said in an emailed statement that “it is continuously looking at opportunities to grow its business, but will not comment on any specific situations or market speculation.”

The deal would be just the latest of many that have transformed the population of North Sea producers over the past five years.

Under pressure from a fall in oil prices to near 14-year lows of $26 a barrel in 2016, major oil and gas companies have been forced to sell assets to private equity-backed investors and specialized operators.

Funds including Neptune, backed by Carlyle Group and CVC Capital Partners, and Chrysaor, backed by EIG Global Partners, among others, have since raised billions of dollars to snap up what they see as bargains in the sector.

Chevron, which produced 50,000 barrels of liquids and 155 million cubic feet of natural gas per day on average in 2017, is looking to free up cash for longer-term, more high-margin businesses in the United States.

Earlier this month, it made a $33 billion bid in cash and stock to buy Anadarko Petroleum and bolster its position in shale oil and the liquid natural-gas market, which was however rivaled on Wednesday by Occidental Petroleum Corp.