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Reuters
Italian energy group Edison, part of French utility EDF, is preparing the sale of its oil and gas unit, the latest power producer to abandon fossil fuels to focus on its retail business, four industry sources said.
Edison has selected investment banks Rothschild and Perella Weinberg to organise an auction for the exploration and production division, which could be valued at $2 billion to $3 billion, one of the sources said.
The company has been looking to increase the size of its domestic electricity and gas retail business, betting on the market opening up to more competition, with retail energy customers increasingly able to choose their supplier. Edison and EDF declined to comment. Rothschild declined to comment. Perella Weinberg did not respond to a request for comment.
Edison, 99.48 percent owned by EDF, is the third biggest power producer in Italy after market leader Enel and Eni. It is also the third biggest gas wholesaler with a 6 percent share, compared with market leader Eni’s 83 percent. EDF took control of Edison in 2012. Edison’s oil and gas production has grown sharply over the past decade, with activities focussed in Italy, the British and Norwegian North Sea, Egypt, Israel, Algeria, Croatia and the Falkland Islands.
Its Egyptian assets, which include the Abu Qir concession and more than 250 million barrels of oil equivalent in reserves, are considered one of the most attractive parts of the portfolio, according to the sources. Edison tried selling its North Sea oil and gas business last year but was unable to find a buyer, according to bankers involved in the process.