BP an Eni have signed an agreement under which BP will purchase from Eni a 10% interest in the Shorouk concession offshore Egypt, which contains the super-giant Zohr gas field, for $375 million.
Eni is the operator and currently has a 100% interest in the Shorouk concession.
As part of this agreement, BP also has an option before the end of 2017 to buy a further 5% interest in the concession under the same terms.
The purchase, which is still pending from the approvals by the relevant Egyptian Government authorities, is currently expected to complete in the second quarter of 2017.
The Zohr field was discovered by Eni in August 2015. Six wells have so far been successfully drilled on the field.
The field is located in the Mediterranean Sea, approximately 190 kilometres north of Port Said in waters around 1,500m deep.
Meant to be the largest gas discovery made in the Mediterranean, Eni has estimated total gas resources in place in Zohr to be circa 30 trillion cubic feet.
The first phase of development of Zohr is now being fast-tracked. First gas is expected in late 2017.
Bob Dudley, BP group chief executive, said: “This interest in a truly world-scale asset will complement our existing Egyptian business. We already have a strong partnership with Eni in Egypt and look forward to working closely with them to efficiently bring these important resources to the Egyptian market.
Far beyond Zhor, 50 year in Egypt
“BP has now been in Egypt for over 50 years and we continue to see opportunities to further develop our extensive activities here. Beyond Zohr, the first phase of our major West Nile Delta project is on schedule to begin production next year and the fast-tracked development of the Atoll gas field is expected to come on stream in 2018,” Dudley said.
BP has made a series of discoveries in Egypt in recent years including Taurt North, Seth South and Salmon and Rahamat, Satis, Hodoa, Notus, Salamat and Atoll. In June 2016 BP approved the fast-track development of the Atoll Phase One project, expected to begin production in 2018.
BP also has interests a natural gas liquids (NGL) plant and in the downstream sector through the Natural Gas Vehicles Company.
BP operates the West Nile Delta project which involves the development of 5 trillion cubic feet of gas resources and 55 million barrels of condensates. Production is expected to be around 1.2 billion cubic feet a day (bcf/d), equivalent to about 30% of Egypt’s total. The Wes Nile Delta project will supply the country’s national gas grid. Production is expected to start in 2017.
Around 40% of total gas, 40% of oil and 10% Egypt’s annual oil and condensate
Through joint ventures with EGPC/EGAS and IEOC (Eni), the Pharaonic Petroleum Company (PhPC) and Petrobel, BP currently produces close to 40% of Egypt’s total natural gas.
To date, BP Egypt, in collaboration with the Gulf of Suez Petroleum Company (GUPCO), BP’s joint venture company with the Egyptian General Petroleum Company (EGPC), has produced almost 40% of Egypt’s entire oil. Currently the multinational produces almost 10% of Egypt’s annual oil and condensate.
With otal investments at approximately $30Bn the British multinational is one of the largest foreign investors in the country. BP’s major business in Egypt consist primarily of oil and gas exploration and production.
Image over the headline.- Maersk discovery drilling in Egypt. © BP plc.
