Thursday, Sep 15, 2011

--Euro-zone debt woes won't hit GDF Suez's EUR11B/year capex plan through 2013

--Comments come as European stocks rally on signs of progress on the sovereign debt crisis

--GDF Suez CEO confirms in talks with ENI to sell North Sea gas fields

--GDF Suez looking at opportunities in Libya water, gas exploration, production

(Adds details.) 


 
   By Selina Williams 
   Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--French utility giant GDF Suez SA (GSZ.FR) has no intention of cutting its capital expenditure for 2011 through 2013, despite the impact of the euro-zone sovereign debt crisis on the region's corporate sector, the company's chairman and chief executive said Thursday.

The comments from the CEO of one of Europe's top utility companies come as European stock markets soared Thursday on growing investor confidence that progress is being made on the euro zone's sovereign debt situation and ahead of a Friday meeting of key European and U.S. officials.

"So far we have decided to stick to our EUR11 billion-a-year capex plan," Gerard Mestrallet told reporters in London.

The company is in a good position to meet its investment targets thanks to a strong balance sheet with EUR10 billion in cash and billions in undrawn credit facilities. The French power group has also been restructuring its corporate debt in the period between the 2008 crisis and now, Mestrallet added.

He said GDF Suez, which has completed two major transactions in less than four years, was also on track with its plan to divest some EUR10 billion in assets by 2013 as it focuses on organic growth.

"So far after six months we are able to announce that 60%, or EUR6 billion, has been realized," he said, adding that those assets included non-core assets or businesses where GDF Suez held a minority stake in projects operated by other companies.

These asset sales have already offset the impact of the merger of GDF's international assets with the U.K.'s International Power. The $2.5 billion transaction completed in February, making GDF Suez the world's largest utility by revenue.

Mestrallet also confirmed reports in the French press that the company was in talks with Italian energy giant ENI SpA (ENI.MI) to sell its 10.4% stake in the Elgin, Franklin and West Franklin gas fields in the North Sea.

In early August, GDF Suez said it was in talks to sell the assets and said the amount of the transaction would likely be around EUR600 million, representing a net gain of EUR300 million at the time.

Mestrallet also said GDF Suez is looking at opportunities in Libya in several areas including water and contracts for the exploration and production of natural gas.

Libya is now focusing on developing its natural gas sector where it aims to become a major player alongside key producers such as Qatar and Algeria amid a broader shakeup of the North African country's energy industry after rebels took over Tripoli last month.

Separately, Mestrallet said the company will review its nuclear policy in mid-2012 once it has the complete picture on the results from stress tests at Europe's nuclear reactors and more clarity on various European government's positions on atomic power following the partial meltdown at Japan's Fukushima nuclear facility earlier this year.

GDF Suez's current strategy is for nuclear to comprise 10% of its power generation portfolio. Mestrallet said it was too early to say more on a project to build a new nuclear power plant in the U.K. as the investment decision wouldn't be made before 2014-2015.

At 1213 GMT, shares in GDF Suez were up 2.5% at EUR20.82.

-By Selina Williams, Dow Jones Newswires +44 207 842 9262; selina.williams@dowjones.com

(END) Dow Jones Newswires

15-09-11 1256GMT