BG Said to Sell Gas Field Off Gaza After Israel Blocks Project

BG Group Plc, the U.K.’s third- largest oil and gas producer, will sell a gas field off the Gaza Strip after its development was blocked by Israel, according to two people with knowledge of the matter.

The company may get $70 million to $80 million for the Gaza Marine field, one of the people said, declining to be identified because the talks are private. A spokesman for Reading-based BG declined to comment.

BG ended talks with Israel on selling gas from the field in 2008 and closed its office in the nation citing differences over price. The company, which holds a 90 percent stake, discovered about 1 trillion cubic feet of gas in 2000.

Israel was also concerned the Hamas Islamic group governing Gaza would get some revenue from the field. Consolidated Contractors Co. has the rest of the license and the Palestinian Authority has an option to acquire a stake.

“Israel operates always on the basis of might is right,” said Charles Gurdon, a managing director at Menas Associates, which advises companies and governments on border disputes. “It has the ability to do that and it does it.”

Israel Finds Gas

Israel, which relies on gas supplies from Egypt, has less need for Gaza Marine’s gas after making discoveries in its own waters. Noble Energy Inc. and partners have found at least 30 trillion cubic feet of gas offshore, enough to meet Israeli demand for more than a century, according to BP Plc (BP/) data.

“You shouldn’t hold your breath on this one,” BG Chief Executive Officer Frank Chapman said last year, when asked about prospects for Gaza Marine.

BG plans to sell $5 billion of assets in the next two years to maintain investment and production growth at projects in Brazil, the North Sea and Australia, it said on Feb. 9.

Source: Bloomberg


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