Russia’s Rosneft has closed the US$1.13 billion deal to acquire stake in the Shorouk concession, containing the giant Zohr field offshore Egypt from Italy’s Eni.
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Map of Zohr, from Eni. |
Rosneft now owns 30% stake in the Shorouk concessions agreement for the development of the deepwater Zohr field, the largest gas field in the Mediterranean Sea.
Rosneft says it has also refunded its share in past project costs to Eni.
The deal, according to the Russian giant, will enable the company to share significant experience in offshore field development, using existing competencies in offshore production.
Participation in the development of a unique production asset will strengthen positions of Rosneft in the strategic markets of Europe and Middle East, Rosneft says.
"This transaction confirms once again the validity of Eni’s 'dual exploration' strategy, which consists of selling minority stakes in its exploration successes, while maintaining control and operatorship, in parallel to the fast track development of discovered reserves," says Eni. "Through this strategy, which allows accelerated monetization of the exploration successes, Eni has been able to cash in more than $9 billion in the last four years."
Zohr, discovered in 2015, lies in the Nile Delta basin off Egypt in the Block 9 (Shorouk block), close to Cypriot waters. Its acreage covers about 230sq km, with its in-place reserves exceeding 850 Bcm.
“Having closed the deal to acquire a stake in the concession agreement for the development of Zohr gas field, Rosneft has entered the world class project,” says Rosneft Chief Executive Officer Igor Sechin. “It opens up the opportunities for the Company to reinforce its positions in the promising and strategic region, broadens potential of our trading division and enhances our mutually beneficial cooperation with Egypt.”
Eni has estimated total gas resources in place in Zohr to be approximately 30 Tcf. The first phase of two for the development of Zohr is being fast-tracked, with first gas expected in late 2017. "Its [Zohr's] start-up is scheduled by the end of 2017, just over two years after its discovery, setting a record for the industry," says Eni.
With the close of the deal, Eni remains operator of Zohr through its subsidiary IEOC with 60% stake. Rosneft holds 30% through its subsidiary Upstream Projects PTE, and BP holds 10%.
In February, BP completed its $375 million deal to acquire 10% in the Shorouk concession.
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