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Delek closing in on $2 bln deal for Chevron's North Sea oilfields - sources

Wed, 24th Apr 2019 16:38

By Clara Denina , Ron Bousso and Shadia Nasralla

LONDON, April 24 (Reuters) - Israel's Delek Group is closeto clinching Chevron's oil and gas fields in the British NorthSea, which have a price tag of around $2 billion, sourcesfamiliar with the matter told Reuters.

Delek, via its North Sea oil and gas operatorIthaca Energy, could reach an agreement within days, two of fivesources said.

U.S. oil major Chevron Corp kicked off the sale ofits central North Sea oil and gas fields Alba, Alder, Captain,Elgin/Franklin, Erskine and Jade as well as the Britanniaplatform 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 $1.8and $2 billion for the assets, which exclude Chevron's 19.4percent stake in the BP-operated Clair field.

The Israeli company beat competitors including a consortiumformed by Britain's Premier Oil and U.S. private equity fundApollo Global Management and also British petrochemical makerIneos Group, the sources said. It hired JP Morgan and BNPParibas as advisors to the acquisition.

The acquisition would mark another step for Delek towardsits expected public listing, the sources said. The companyearlier this month acquired Shell's 22.45 percent stake in theCaesar-Tonga field in the U.S. Gulf of Mexico for $965 million.

Chevron and Delek declined to comment.

Ithaca said in an emailed statement "it is continuouslylooking at opportunities to grow its business but will notcomment on any specific situations or market speculation."

The deal would be just the latest of many that havetransformed the population of North Sea producers over the pastfive years.

Under pressure from a fall in oil prices to near 14-yearlows of $26 a barrel in 2016, major oil and gas companies havebeen forced to sell assets to private equity-backed investorsand specialised operators.

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

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

Earlier this month, it made a $33 billion bid in cash andstock to buy Anadarko Petroleum and bolster its positionin shale oil and the liquid natural gas (LNG) market, which washowever rivalled on Wednesday by Occidental Petroleum Corp.

(Additional reporting by Steven Sheer in Jerusalem; Editing byElaine Hardcastle)

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