Cepsa Wins Egyptian Exploration License

CEPSA has been awarded a new exploration permit after taking part in a licensing round organized by Egypt's state-owned oil company, EGPC (Egyptian General Petroleum Corporation).

This permit is for a block called South Alamein, measuring 3,228 square kilometers and located in a region known as the Western Desert, in the north-western part of the country, containing an oil and gas-rich basin where a variety of international energy companies such as ENI, BP and Edison are already operating.

The exploration contract, initially awarded for a three-year period, involves the performance of seismic acquisition and the drilling of several exploratory wells, with CEPSA acting as the operator. Following the exploration phases and in the event that CEPSA were to discover a commercial field, it would be granted a 20-year period for hydrocarbons development.

The definitive award of the license to CEPSA is conditional on final ratification by the Egyptian Parliament, as is the usual procedure in these cases.

Additionally, CEPSA has a stake in a block called "North Bahrein", likewise in Egypt's Western Desert, in a joint venture with the Italian oil company ENI (25% CEPSA/75% ENI). This block was also awarded in a bid-round which took place in 2005, and a seismic survey is due to be conducted at the end of 2006.

Currently, CEPSA's upstream activities are concentrated in Spain, Algeria, Egypt and Colombia, and the fields where the Company has interests produce approximately 250,000 BOPD.

CEPSA's efforts to expand its oil & gas upstream operations represent a further step forward in the Company's strategy of diversifying its businesses, with the target of achieving a more equitable balance in earnings contributions from its different segments.