UK’s BP reached an agreement with Italian Eni to buy a 10% stake in Egypt’s Shourouk Concession which includes Zohr field for $375m, reported Reuters. Sources with the Egyptian Ministry of Petroleum confirmed that drilling and development processes are ongoing in accordance to the scheduled timeframe to start production within 2017, and will not be affected by the transaction, reported Amwal Al Ghad.
Eni and BP further agreed that BP could purchase another 5% of the field before the end of 2017, when Zohr is slated to start production, under the same terms. Accordingly, BP would repay Eni around $150m in past expenses.
The deal gives Eni much-needed cash as part of its $5.3b divestment plan to continue investing and paying dividends despite weak oil prices, as well as deepens BP and Eni’s partnership in Egypt, where they announced a significant gas discovery in the East Nile Delta in June. Moreover, a stake in Zohr, one of the biggest ever gas discoveries, will raise BP’s exposure to the gas market, just months after rival Shell became one of the world’s biggest gas traders by acquiring BG Group.
Zohr, discovered by Eni in 2015, has an estimated 850bcm of gas in place. It will help plug Egypt’s acute energy shortage and save the country billions of dollars in hard currency that would otherwise be spent on imports. This comes as a run of big gas finds off the Egyptian coast have made the country a top destination for energy investment.