Specifically, the Company acquired three licenses in the North Sea and two in the Norwegian Sea. Edison's interest in these blocks, which it owns through joint ventures with major international operators, varies between 50% and 15%.
The contracts call for an initial exploration period of five to six years that will be divided into three to four operating phases. If no commercial deposits are discovered at the end of each phase, the joint ventures will have the right to relinquish the license.
With this transaction, Edison strengthens its presence in the North Sea, where it already holds three mineral leases, including the Markham field, which went on stream in 1992 and, thus far, has produced 17 billion cubic meters of natural gas and about 5 million barrels of condensate. The field's current output is exported to the Den Helder terminal in the Netherlands.
"Exploration and production activities will play a particularly important role in Edison's future growth and our increased efforts in this area are yielding attractive results," said Umberto Quadrino, Edison's Chief Executive Officer. "This past December, we signed an exploration contract as operator for an offshore block along Egypt's northwest coast and, recently, we began the second phase of an exploration project in the Ivory Coast."
The 2007-2012 Industrial Plan calls for an expansion of Edison exploration and production operations, with the goal increasing reserves and boosting hydrocarbon production to a level equal to about 15% of the Group's future needs.
Norway is a country with a high exploration potential. Reserves amount to about 13 billion cubic meters of oil equivalents, of which 32% is in production, 42% has already been discovered and 26% (equal to 3.4 billion cubic meters) is classified as presumed and undiscovered. Based on 2005 estimates, natural gas represents 55% of available reserves [Source: NPD - Norwegian Petroleum Directorate].
The exploration activities will be carried out in the Norwegian Continental Shelf, which extends from the coastline to a water depth of 200 meters in the North Sea, the Norwegian Sea and the Barents Sea. because of the different degrees of maturity, these areas present different but generally low exploratory risks.
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