The recent $1.4 billion-“historical deal” between Edison S.p.A and the Egyptian General Petroleum Corporation has grabbed the sector’s attention for the gigantic re-entry of the Italian company into the Egyptian petroleum field once more. Edison’s Chief Executive Officer Umberto Quadrino reveals to Egypt Oil & Gas the company’s plan to boost the offshore fields of Abu Qir
What is the significance of this agreement to Edison?
It is an important agreement, which enables our Company to enlarge its presence in such a strategic Country as Egypt, with a high potential of hydrocarbons production.
I am very pleased for the agreement we signed; it is an important and fundamental step ahead in the strategy of Edison. Egypt is one of the main areas of interest and we plan to double the output of Abu Qir.s
This agreement marks your re-entry to the Egyptian petroleum sector. What is different for Edison this time?
We have returned to Egypt with the aim of consolidating our presence in this country with which we always had very good relations. We planned to undertake significant investments and we want to be a long and reliable partner for the Egyptian economy.
Are there any different measures taken this time to implement the company’s operations in Egypt?
Compared to our past experience in Egypt, Edison will now play a leading role in the operation of a large hydrocarbon area, therefore our role and presence will be more prominent.
What is the time plan set by Edison to develop the Abu Qir concession?
Edison intends to double the current production over the next four years, in order to achieve an annual production of more than three billion cubic meters of gas a year by 2012. The overall investment program set by Edison counts for approximately $1.7 billion to build three new platforms, 31 new wells, and 40 kilometers of new pipelines under sea in addition to the enlargement of the existing infrastructure on shore.
The Abu Qir Concession agreement enables Edison to significantly increase its hydrocarbons reserves by adding 27 billion cubic meters of gas equivalent of reserves (proven and probable) to the current 33 billion, and will enable the company to increase its annual gas production to 2.6 billion cubic meters from the current 1.1 billion cubic meters by 2013.
Are there any plans for Edison to sell a 25% stake in Abu Qir gas field, as stated in many newswires?
Edison may be interested in selling a minor share in Abu Qir in the frame of an ordinary portfolio optimization plan. However, there is no specific term or decision has been taken yet.
What companies are most likely to acquire this share?
Several companies have expressed interest in the stake, but no decision has been made yet.
What are your expectations for your operations this year in the shadow of the current economic crisis? In Egypt specifically and worldwide generally
We maintain our investment commitments in Egypt as in the other areas where Edison is present putting the maximum effort on operation and performance excellence.
Edison, founded in 1883, is Europe’s oldest energy company. At the end of 2007, having completed one of Europe’s most ambitious capital investment plans during the past five years, it had an installed capacity of about 12,000 MW. In the natural gas area, Edison is Italy’s second largest operator with activities in every aspect of the business: from exploration to production, importation, distribution and sales. In 2007, the company had revenues of 8.3 billion euro and earned a net profit of 497 million euro.