Edison is developing numerous projects for the construction
of infrastructures that will give Italy access to more diversified, safer and more competitive supplies
of natural gas.
less (-4.7%) than in the same period last year. This reduction is the net result of a decrease in output in Italy caused by the natural depletion of gas fields and an increase of production in Egypt.
On the procurement side, overall purchases of natural gas increased in 2005. Specifically, imports of natural gas via pipeline or as LNG declined to 6,681 million cubic meters, down slightly from 6,728 million cubic meters in 2004. At the same time, domestic purchases grew by 2,293 million cubic meters (+67.0%), rising from 3,421 million cubic meters in 2004 to 5,714 million cubic meters in 2005.
Overall, imports of natural gas accounted for 50.9% of the natural gas Edison sold in Italy, down from 60.4% in 2004.
At 2,229 barrels, production of crude oil was only slightly lower than in 2004, as the fields continued to produce at a good rate. However, average prices were sharply higher, rising from 14.80 euros per barrel to 21.70 euros per barrel in response to favorable trends in the benchmark oil markets.
Investments in Exploration
During 2005, investments in exploration totaled 22 million euros, of which 20 million euros were allocated to projects outside Italy and 2 million euros were used for projects in Italy.
Technical and financial assessment studies completed in Italy resulted in the definition of the Argo and Codogno exploration projects, with drilling scheduled to start in 2006. In addition, the Group was awarded two new exploration permits in the Padanian Plain and, on the strength of previous discoveries, applied for production concessions for the Tresauro and Capparuccia fields.
Outside Italy:
  • In Egypt, the Group was awarded the West Wadi El Rayan permit and proceeded with 2D/3D seismic mapping to delineate the prospects that will be drilled in 2006.
  • In Algeria, two wells were drilled in the Reggane permit and both produced natural gas. In addition, drilling of another exploratory well is already under way, with completion expected in the first quarter of 2006, and 2D/3D seismic mapping of the Akabli M'Sari permit has been completed.
  • In Croatia, 3D seismic mapping of the area encompassing the Izabela gas field was completed at the end of the year, followed by the drilling of a delineation well that will become a production well in the future. In December, the Group was awarded a new offshore gas exploration permit in the Ivona block.
  • In the United Kingdom, Edison received a new permit for offshore gas exploration in the North Sea.
  • In the Ivory Coast, 3D seismic mapping of the CI24 offshore permit had almost been completed by the end of the year.
  • In Senegal, the Group completed the 2D seismic mapping of the Rufisque offshore permit.
Hydrocarbon Reserves
The Group's hydrocarbon reserves increased to 26 billion cubic meters of natural gas equivalents, up from 24 million cubic meters of natural gas equivalents. The increase of 2 billion cubic meters, net of 2005 production of 1.626 billion of cubic meters of natural gas equivalents, was made possible primarily by new discoveries in the Reggane and Sali exploration permits in Algeria.
Corporate Activities
Financial Highlights
(in millions of euros) 2005 2004 % change
Sales revenues 42 62 (32.3%)
EBITDA (76) (89) 14.6%
as a % of sales revenues n.m. n.m.  
Capital expenditures 2 1 n.m.
Number of employees (1) 526 539 (2.4%)
(1) End of period amount.
Corporate Activities, which consist of those operations of Edison Spa, the Group's Parent Company, that engage in activities that are not industrial in nature and of certain holding companies and real estate companies, had net revenues of 42 million euros, or 20 million euros less than in 2004. A drop in nonrecurring gains accounts for this decrease.
EBITDA were negative by 76 million euros, as the loss narrowed by about 13 million euros compared with 2004.
Capital Increases
The capital increases carried out during 2005 (14.2 million euros) include 6.96 million euros generated in 2005 by the conversions of outstanding Edison warrants, which can be exercised at any time until December 31, 2007 to purchase Edison shares, and 7.26 million euros generated by the exercise of