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News Releases 2007
Upstream oil and natural gas project in Australia
August 10, 2007
CIECO Exploration and Production (Australia) Pty Ltd (incorporated in Australia; hereinafter referred to as "the Subsidiary"), a wholly-owned subsidiary of ITOCHU Minerals & Energy of Australia Pty Ltd[IMEA](100% owned by ITOCHU Corporation), signed a Sales and Purchase Agreements on August 9,2007 with each of Anzon Australia Limited(Operator) and Beach Petroleum Limited, two Australian mid-cap oil and gas companies, to acquire the total of 20% participating interest in VIC/L26, 27 and 28 Production Licenses offshore Victoria in Australia(known as Basker-Manta-Gummy fields), which the Subsidiary will hold subject to the Australian Governmental approval. The consideration for the entire 20% of the interest is A$246 mill.
This concludes the joint bidding process undertaken by Anzon and Beach. In the three Production Licenses acquired, the Basker and Manta fields commenced production in 2006, with a production capacity of 15,000 barrels per day(B/D). The Joint Venture for the Licenses is currently planning to enhance crude oil production in the near-term, and to investigate future gas development options. ITOCHU is expecting stable earning over 15 years through this acquisition.
While crude oil from these fields is currently sold to mainly Australia, ITOCHU is considering to the potential to identify markets in Asian countries including Japan, given the excellent quality of Basker crude, typically represented by light and low sulfur.
This transaction will add ITOCHU approximately 2,000-3,000B/D toward the end of this year. It is a strong commitment of ITOCHU to continue exploration and development activities in Australia and this participation is a key milestone in achieving such objective. ITOCHU is planning to invest more than 40 billion JPN-Yen including this particular purchase of these assets and development work, in upstream oil and natural gas businesses in Australia.
With regard to the energy development activities, ITOCHU is diversifying its crude oil and gas development and production investments in various countries such as Azerbaijan, U.K. North Sea, Australia, Indonesia, Algeria, Namibia and Russia in risk-distribution perspective. ITOCHU also invested in liquefied natural gas (LNG) projects in Qatar and Oman. ITOCHU will continue the acquisition of production and development assets considering well-balanced energy portfolio in overseas countries over 2007.