Repsol is operator of the aforementioned Khalda Group, with a 50% stake. The other partners are the U.S.A. company Apache, with 40%, and the Korean Samsung, with 10%. The Khalda concession is operated by an Egyptian company, Khalda Petroleum Company, jointly owned by the former consortium and the Egyptian General Petroleum Company.

This ten-year contract signifies the development of gas reserves estimated at some 14 billion cubic metres, and will involve an investment by the Khalda Group of more than 400 million dollars. Production is expected to start in July, 1999.

The project basically consists of the development and on-streaming of 4 fields in the Salam area, where a plant for treating 200 million cubic feet of gas per day will be built. Another plant will also be installed in the Tarek region to treat 100 million cubic feet per day. Gas will be piped from these two facilities to the main pipeline 300 kilometres long, which connects the western desert to the city of Alexandria. This main gas pipeline will also transmit Shell�s production from the Obayed area, and will be jointly financed by the Khalda Group and Shell. It will be connected to the Egyptian National Gas Grid.

Repsol is the third largest oil company in Egypt, with a net production of 30,000 barrels per day, from the Khalda, Umbarka, South Umbarka, Gulf of Suez East and Gulf of Suez West concessions. It is placed behind Amoco and Agip, but in front of Shell, which is fourth. Repsol began its activities in Egypt back in 1972, with an exploration and production contract on the Umbarka field in the Western Desert. Since then, Repsol has considerably increased its interests in that country through a policy of continuous acquisitions, buying oil-producing assets and stakes in exploration licences. Last year, our company carried out extensive exploration activity in Egypt, where it has made three gas and condensate discoveries in the last four months.