This sale, which will be effective as of January 1, 2003, is for a total price of 1.6 billion euros and will produce a further reduction of Edison Group's indebtedness of the same amount, less tax charges and accounting adjustments applicable at closing.
Umberto Quadrino, Edison's Chairman, said: "We are delighted to have reached this agreement with Petronas. This sale will produce a further, significant improvement in our Group's financial position. In any case, Edison will continue to operate in Egypt, where gas from its Rosetta field is sold in the domestic market, and will continue to pursue exploration and production opportunities in Egypt and other regions of the world."
The West Delta Deep Marine concession is the largest integrated natural gas development project in the Mediterranean offshore. Its output is sold both to the Egyptian and export markets. Natural gas reserves totaling about 370 billion cubic meters have already been discovered in eight fields of the WDDM block, which still holds a very high potential of additional discoveries. In March 2003, Edison and its partners — British Gas and EGAS of Egypt — began delivering gas from the Scarab/Saffron fields to the Egyptian market. These gas deposits and production facilities are located about 80 kilometers from the Mediterranean cost, offshore from Idku, near Alexandria. Development of the Simian and Sienna fields is also continuing. These fields will supply gas to the first train of an LNG facility. The LNG will be sold to Gaz de France under an existing long-term contract. Development of the Sapphire field is expected to produce the natural gas needed to feed a second LNG train. The first train is expected to go on stream in the third quarter of 2005, followed by the second train in mid-2006.
The closing of the sale to Petronas is subject to the Government of the Arab Republic of Egypt approving the transfer of Edison's rights under the concession agreement.
Once this approval is received, the buyer will pay 92% of the contract price. The balance will be paid when the shares are transferred and the buyer succeeds the seller in all existing contracts.
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