The Israeli newspaper Israel Hayom reported that a landmark deal to sell huge amounts of Israeli gas worth $2.7 billion to Australia has collapsed at the last minute.
Australia's Woodside Petroleum Ltd. agreed in February to purchase a 25 per cent stake in production of the Leviathan gas field, but disagreements have emerged at the last minute and the deal signing ceremony due to take place on Thursday was delayed.
According to Israeli sources, the Australian company's CEO and Managing Director Peter Coleman, who was present in Israel, objected to Israel's formula for taxing exported gas as recommended in draft legislation by the Ministry of Finance.
As a result, Woodside refused to sign the contract, leading to media speculation that the deal would be cancelled entirely.
Coleman had previously warned that Woodside would be able to pull out of the deal if the 27 March signing deadline was not met.
However, in a statement to the Australian stock exchange, Woodside said that: "Discussions continue with the parties and the Israeli government with a view to resolving the remaining issues and executing definitive agreements."
The Australian CEO is reportedly leaving Israel today while the Israeli authorities continue to search for a solution to the problem.