Akin Acts on Landmark Israeli-Palestinian Natural Gas Deal
A pair of Dewey & LeBoeuf defectors now with Akin Gump Strauss Hauer & Feld are advising the Palestinian Power Generation Company (PPGC) on a 20-year, $1.2 billion deal to purchase natural gas from Israel’s Leviathan offshore gas field.
Announced Sunday at the historic American Colony Hotel in Jerusalem, the landmark deal calls for a group of energy companies to begin selling gas from Leviathan to the privately owned PPGC within three years. In turn, the PPGC will build a $300 million natural gas processing plant in the West Bank city of Jenin.
While the discovery in November 2010 of the Leviathan field—which sits about 80 miles west of the Israeli coastal city of Haifa—could end up having a major impact in the politically volatile Middle East, offshore oil production is not expected to begin until 2017.
John LaMaster, an Akin energy and M&A partner based in the firm’s London office, is working with corporate partner Marc Hammerson and associate Caroline-Lucy Moran on the deal for PPGC. The Palestinian power company also relied on James-Antony Platania, a senior in-house lawyer with Athens-based parent Consolidated Contractors Company, a previous client of LaMaster's, which is one of the largest construction companies doing business in the Middle East. (CCC’s group general counsel is Edgard Marina.)
Hammerson, who only joined Dewey in October 2011 from British firm Stephenson Harwood, and LaMaster joined Akin in May 2012 as their now-defunct former firm began its final descent into bankruptcy. Dewey's former energy group scattered to a handful of such Am Law 100 firms as Baker Botts and Morgan, Lewis & Bockius. (Steven Otillar, a Houston-based Dewey energy partner who also joined Akin, settled a dispute with Citibank last year over a loan he took out to cover his capital contribution to the bankrupt firm.)
LaMaster and Hammerson had already been tapped to take the lead for PPGC on its talks with the consortium of energy companies that hold drilling rights to the Leviathan field. When the duo left Dewey, they took the assignment with them. As one might expect—given the long-standing antipathy between Israel and the Palestinians, who are seeking a state of their own—the negotiations were complicated by other issues.
“We’ve been working on this for more than three years,” says LaMaster, who spoke with The Am Law Daily by phone from London. “And there were a number of times where we were close to getting something done before negotiations broke off, only to start again.”
Perhaps one of the biggest hurdles was a November 2012 conflict in the Gaza Strip between Israel and Palestinian militant group Hamas, which temporarily scuttled any possibility that the Jewish state would share its natural resources with its longtime adversary.
But LaMaster says rivalries between ruling Palestinian factions—Hamas governs the Gaza Strip, while the Palestinian Authority holds sway in the West Bank—actually helped push Israel toward a deal with PPGC. While the West Bank remains separated from Israel proper by a massive wall, Israeli Prime Minister Benjamin Netanyahu's government aims to favor the PA in its West Bank stronghold over Hamas in its Gaza Strip base, where the more militant faction continues to refuse to recognize the Jewish state’s right to exist.
The decision to export natural gas from Israel, a country where natural resources are in limited supply, also faced some opposition. LaMaster says foreign oil companies that won Leviathan concessions campaigned to export some gas from the field in order to monetize their asset.