German
utility RWE AG has initiated the sales process for the Egyptian assets of its
oil and gas production unit Dea, three people familiar with the matter told Dow
Jones Newswires.
The information memorandum for the two undeveloped Egyptian fields have
been sent to potential buyers last week and first round bids are likely to be
due late January, the people said. RWE is looking for a price of up to about $1
billion, according to one of the people, though it is unclear whether they
could get that much.
Spokespeople for RWE and Dea declined to comment on the information.
By selling the Egyptian fields, RWE can save about $3 billion in capital
expenditures which it would have needed to develop the fields, one of the
people said. RWE holds 40% in the Egyptian field North Alexandria and 20% in
West Mediterranean Deep Water. The rest is held by BP
PLC.
In a second step, RWE plans to dispose of more Dea assets, including projects
in the U.K. and Norwegian North Sea.
The sale is part of RWE's EUR11 billion asset disposal program aimed at
strengthening the balance sheet. On top of that, the company raised about
EUR2.1 billion from a capital increase early December.
The Essen, Germany-based company has been particularly hard-hit by the German
nuclear retreat, exacerbating an already difficult business climate marked by
weak power and gas prices. Its shares are the third biggest loser in Germany's
main index DAX this year, having shed about 46% in value since January.