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Tue 15 Apr 2008 10:39 AM

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Kuwait Energy snaps up Aussie firm's Mena unit

Oil Search sells unit for $200mn, including three fields in Eygpt and five in Yemen.

Australian-listed oil and gas firm Oil Search said on Tuesday it will sell its Middle East and North Africa (Mena) unit to Kuwait Energy Company for $200 million plus working capital to help fund a liquefied natural gas (LNG) project.

The Mena assets include three fields in Eygpt and five fields in Yemen. The sale will free up funds for its Papua New Guinea LNG project, Oil Search said.

"It will also enable the company to refocus its organic growth programme on areas of greater materiality going forward," Oil Search Managing Director Peter Botten said in a statement.

The effective date of the transaction is back-dated to February 28 and the completion, subject to government and joint venture partner approvals, is expected in mid-2008, Oil Search said.

Oil Search, a partner in an Exxon Mobil proposed LNG project in Papua New Guinea, said in March the project was estimated to cost $10-$11 billion.

Oil Search had said that it expects to put in up to $1.3 billion in equity and $2.9 billion in debt to help fund the development of the project.

The proposed LNG facility would have a capacity of 6.3 million tonnes a year and is to have first delivery by 2014. (Reuters)

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