Sale Of Engie E&P Unit To Neptune Imminent


PARIS, May 11 (Reuters) - Engie is in advanced talks with Neptune Oil & Gas about the sale of its oil and gas exploration and production unit and a deal is imminent, a source familiar with the situation told Reuters on Thursday.

Confirming a report in French financial daily Les Echos published late on Wednesday, the source said the talks were going well and could be concluded soon.

The paper said a board meeting had been held about the planned sale on Wednesday and that board members had approved the sale but that some details still had to be agreed upon.

The report added that Engie plans to announce it will start exclusive talks with Neptune for the sale of its 70 percent stake in Engie E&P for about 3.3 billion euros ($3.6 billion), valuing the unit at 4.7 billion euros.

The talks had been complicated by rising oil prices and by China Investment Corporation's (CIC) desire to increase its stake in Engie E&P, the report also said.

Engie declined to comment.

Banking and industry sources told Reuters last month that Neptune, set up in 2015 by private equity funds Carlyle Group and CVC to build a North Sea E&P company led by former Centrica CEO Sam Laidlaw, was set to announce the acquisition of a majority stake in Engie E&P within weeks.

They also said that CIC wanted to increase its stake in Engie E&P to 49 percent, after buying the initial 30 percent in 2011 for 2.3 billion euros.

ENGIE E&P's upstream assets span from the UK to Norway and Germany, Algeria, Egypt and Asia but its portfolio consists mainly of licenses in the North Sea area. The company has proven and probable ("2P") reserves of 672.4 million barrels of oil equivalent (9Mboe) and produced 56.3 Mboe last year.

Engie is more than halfway through a three-year 2016-18 plan to sell 15 billion euros worth of assets in a drive to orient the company more towards contracted and regulated businesses such as energy services and grids.

Engie CFO Judith Hartmann said in March that Engie was in advanced talks with potential buyers of its E&P unit and that the company was confident in its ability to achieve 85 percent of its planned assets sales by the end of 2017.

(Reporting by Geert De Clercq; Editing by Sudip Kar-Gupta and Jean-Michel Belot)


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