Acquisition of part of Total's Interest in an onshore oil field in Italy

Mar. 18, 2013

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Mitsui & Co., Ltd. ("Mitsui", Head Office: Chiyoda-ku, Tokyo, President and CEO: Masami Iijima) has reached an agreement with Total E&P Italia S.p.A ("Total"), a group company of Total S.A, to acquire Total E&P Energia Italia S.r.l which owns a 25% participating interest in the Tempa Rossa onshore oil field in the Gorgoglione concession in Italy through its newly established subsidiary Mitsui E&P Italia A S.r.l ("MEPIT"). The sale and purchase agreement was signed on March 18, 2013. The transaction will be completed after fulfilling certain conditions, including the approval of the Italian government. Total will remain as operator with a 50% participating interest.

Tempa Rossa is an onshore oil field located in the Potenza province of Italy's southern state Basilicata. Its original oil in place is estimated to range between 6 to 10 billion barrels, which makes it the largest proved and undeveloped onshore oil field in Western Europe. The oil storage layer to be developed is one of the thickest in the world, comprising about 2,000m. To date, six exploratory wells have been drilled, followed by long-term production tests, which all confirmed good level of productivity. Total has been the operator of this concession since 2002. In July 2012, it has declared a final investment decision together with its partner Royal Dutch Shell plc ("Shell") and development work has been commenced.

The total development costs of the concession (100% of the project) are estimated to be approximately 1.6 billion Euros (approx. 200 billion Yen, including sunk cost). Production of crude oil and LPG is planned to commence in 2016. In addition to a lump sum consideration, MEPIT will bear its share of the development costs based on its participating interest incurred after the Effective Date. The recoverable reserves of the entire project are estimated to be approximately 440 million barrels of oil equivalent, with an estimated peak daily production rate of approximately 50,000 barrels of crude oil and approximately 240 metric tons of LPG. MEPIT's corresponding share is anticipated to be recoverable reserves of approximately 110 million barrels of oil equivalent, and production of approximately 13,000 barrels of oil equivalent per day at peak production.

The project is Mitsui's first acquisition of an interest in natural resources in Italy. It is part of the company's plan to acquire crude oil and natural gas assets in the European region, following the participation into the Polish shale gas exploration activity in 2011 and the acquisition of oil and gas producing assets in the U.K. North Sea in 2012. While the decline in production rate for an oil field tends to be relatively fast in general, this project is expected to continue production and generate income for over 50 years and is expected to become a core asset in Mitsui's energy business in the region. Given its huge original oil in place, there is also upside potential in reserves by improving the oil recovery rate further in the future. Furthermore, Mitsui expects to further build upon the existing strong relationship with Total through this project.

Contractual Coverage

Buyer Mitsui E&P Italia A S.r.l ("MEPIT")
Seller Total E&P Italia S.p.A ("Total")
Acquisition Entire stake of Total's 100% subsidiary Total E&P Energia Italia S.r.l, which owns 25% of the Tempa Rossa oil field in the Gorgoglione Concession
Effective Date November 30, 2012

Project Overview

Asset Tempa Rossa oil field in the Gorgoglione concession
Interest Holders
(after closing)
50% Total [Operator]
25% Shell Italia E&P S.p.A (a 100% subsidiary of Shell)
Location Potenza province in Basilicata, Southern Italy
Recoverable Reserves approx. 440 million boe*
Daily Production approx. 52,500 boe per day at peak
(Scheduled to commence production in first quarter of 2016)

* barrels of oil equivalent

Location of the acquired concessions

Location of the acquired concessions

Overview of MEPIT

Company Name Mitsui E&P Italia A S.r.l
Composition of Shareholders* Mitsui & Co., Ltd.:60%
Mitsui Oil Exploration Co., Ltd.:40%
Location Milan, Italy
Establishment March 12, 2013

* Shareholding in Mitsui E&P UK Limited, which wholly owns MEPIT.
Mitsui Oil Exploration Co., Ltd. owns 40% of Mitsui E&P UK Limited since December 2012.

Overview of Total S.A

Company Name Total S.A.
Headquarters Paris, France
Founded 1924
Traded on Paris Bourse (NYSE Euronext), New York Stock Exchange (NYSE)
Business Exploration & Production, Refining, Marketing and Trading of Crude Oil and Natural Gas
Employees* 96,104
Total Assets* approx. €164.05 billion
Total Production* approx. 2.35 million boe per day
Total Reserves approx.11.4 billion boe

* Financial Year 2011

This announcement contains forward-looking statements. These forward-looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently possessed by it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, financial position or cash flows to be materially different from any future results, financial position or cash flows expressed or implied by these forward-looking statements. These risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest Annual Securities Report and Quarterly Securities Report, and Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.
This announcement is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.


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