Eni sells 10 pct of Egypt's Shorouk concession to Mubadala Petroleum

  • Eni sells 10 pct of Egypt's Shorouk concession to Mubadala Petroleum

Eni sells 10 pct of Egypt's Shorouk concession to Mubadala Petroleum

The deal coincides with the awarding of stakes in two of Abu Dhabi National Oil Company's new offshore concessions to Eni for $875m.

Under the agreements, which are for a duration of 40 years and include a total participation fee of around $875 million, Eni will obtain a five percent stake in the Lower Zakum offshore oil field and a 10 percent stake in the oil, condensate and gas offshore fields of Umm Shaif and Nasr.

ENI paid a participation fee of 2.1 billion dirham (575 million USA dollars) to enter the Umm Shaif and Nasr fields and a fee of 1.1 billion dirham to enter the Lower Zakum.

In both concessions ADNOC owns a 60 percent stake. It has a target production capacity of 450,000 barrels of oil per day.

Spanish refiner Cia Espanola de Petroleos SA paid $1.5 billion for a 20 percent stake in the Sateh Al Razboot and Umm Lulu fields in a deal announced February 18.

Umm Lulu, the largest single oil field up for offer, has attracted winning bids from an Indian consortium led by ONGC Videsh, and Japan's Inpex. On the other hand, about 30% stake in the Umm Shaif and Nasr concession is still up for grabs. Eni has been present in Egypt since 1954, where it operates through the subsidiary IEOC Production BV.

The emirate is seeking partners that can add downstream technology and join projects that will double refining capacity and almost triple petrochemical output, Adnoc said last week.

Eni, which produced an average of 1.8 million b/d of oil equivalent in 2017 from its global operations, has held regular meetings with ADNOC and Mubadala, the emirate's energy and industry investment vehicle, to discuss opportunities for collaboration in the upstream and downstream sectors.

"Eni is very strong in North Africa, but has traditionally been under-exposed to the Middle East", Wood Mackenzie's Quinn said in an email.

Mubadala Petroleum purchased a 10 per cent stake in an Egyptian concession holding the Mediterranean's biggest gas discovery from Italy's Eni, marking the Abu Dhabi hydrocarbons company's first foray into the Arab world's most populous nation. The field has a potential 30 trillion cubic feet of gas in place.

"Eni also believes further collaboration with ADNOC in the downstream would create synergies, bringing mutual benefits from capital, resources and knowledge sharing, and would create significant added value to ADNOC's refining assets", Descalzi said.