- Delek agrees to buy 20% stake in Kraken field from EnQuest
- Company seeking to grow into an international energy brand
Delek Group Ltd. is in talks to expand its basket of overseas oil and gas assets as it seeks opportunities outside the Israeli natural gas market.
Israel’s largest energy company, owned by billionaire Yitzchak Teshuva, signed a non-binding agreement to buy a 20 percent stake from EnQuest Plc in the U.K.-based Kraken project, according to a statement Monday to the Tel Aviv bourse. The transaction will cost Delek $162 million.
The purchase is part of Delek’s strategy to acquire industry know-how and grow into an international energy brand. While Delek is a major shareholder in the development of Israel’s multi-billion dollar natural gas fields, its partner Noble Energy Inc. handles the operational side of the business. Delek last went shopping abroad in October 2015, when it paid $66 million for the control of a Canadian project.
As part of the agreement, Delek will loan EnQuest $20 million for as long as five years, charging 3 percent annual interest. Production in the Kraken field, which holds 147 million barrels of heavy oil, will begin in 2017, according to the statement.
Delek shares rose 1.2 percent to 810.60 shekels, set for their highest close since Dec. 10, as of 11:22 a.m. in Tel Aviv. EnQuest gained 1.7 percent to 30.25 pence.