Woodside Petroleum is holding back a $750 million payment for a project in the Mediterranean Sea, almost a fortnight after Israel decided to keep a larger than expected amount of gas for domestic consumption.
The Israeli cabinet last month approved exporting 40 per cent of its new found gas reserves, setting aside the remaining 60 per cent to meet the country's gas needs for around 25 years.
Woodside would not comment on why it still had not made an initial $US696 million ($A765 million) payment as part of its 30 per cent involvement in the Leviathan project off the coast of Israel.
The Perth-based oil and gas company was understood to be expecting at least half of the gas to be available for the more lucrative export market.
The Australian dollar has lost more than 12 per cent against the US dollar since the $1.4 billion deal was announced seven months ago.
Analysts say Woodside might have to go back over the numbers to see if the joint venture project is still viable.
Under the deal with US-based firm Noble Energy, Woodside will take an equal 30 per cent stake in the project.
Last year an advisory panel, the Tzemach Committee, recommended Israel export just over half of its gas, sparking outrage among Israelis who want most of the gas reserved for domestic purposes.
Woodside is scheduled to make a second payment of $US200 million ($A219.83 million) once the Israeli government passes the export legislation.
In a statement issued after the Israeli cabinet decision on June 23, Woodside said it looked forward to "considering the detail of the gas export policy".
Despite the political instability in the region as Israel looks to shore up its energy security, the company says it has undertaken a thorough risk and security assessment of Israel.
RBC Capital Markets analyst Andrew Williams said Woodside wasn't in a position to sign off on the first payment.
"They need to go back and recrunch their numbers," he said.
"It puts a slightly higher risk over it, no doubt."
Woodside was waiting for some fiscal certainty before taking the next step.
"They're probably evaluating whether it's still a viable project or not."
UBS analyst Nik Burns said it was still too early to get excited about Woodside participating in Israeli gas exports.
"There is a lot of commercial, technical and political issues to be resolved," he said.
Mr Burns is waiting for information on whether export quotas can be swapped between gas fields.
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