Eni to sell $934m stake in Egypt's Shorouk concession to Mubadala Petroleum

Adnoc awarded Italian firm Eni two stakes in the emirate's offshore concession areas for $875 million following recent wins by the company in Egypt and Cyprus. Reuters

Mubadala will pay Eni $934 million in exchange for the stake in the concession which contains the giant Zohr gas field.

The old ADMA concession, located in the shallow waters of the Persian Gulf, accounts for about a quarter of the UAE's total oil output and half its crude production from offshore fields. A group of Indian companies paid $600 million for rights to 10% of Lower Zakum on 10 February, and Japan's Inpex Corp. bought the same-sized stake last month.

With its new partners, ADNOC hopes to raise output to 1.125 million b/d, from around 700,000 b/d at present.

The signing ceremony in Abu Dhabi was attended by Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan and Italian premier Paolo Gentiloni. ADNOC is finalizing opportunities, with potential partners, for the remaining 15% of the available 40% stake in the Lower Zakum concession, and for the remaining 30% stake in the Umm Shaif and Nasr concession. The award adds a new destination to Eni's Middle East operations, which include exploration and production in Libya, Iraq, Oman and Egypt. Ahmed al-Jaber, ADNOC's CEO, said the agreement is a testament to the strength of the offshore sector in the United Arab Emirates.

"This is the first award by ADNOC to a major (in the offshore renewal), and shows it is looking to find a balance in its strategic partners between companies from major buyers, such as Japan and India, and IOCs (international oil companies) with technology and project delivery expertise", said Tom Quinn, senior research analyst, Middle East Upstream, Wood Mackenzie.

ADNOC hopes to increase production at the Umm Shaif and Nasr concession to 460,000 b/d, from around 300,000 b/d now, as well as producing 500 MMcf/d of gas.

Abu Dhabi's Mubadala Petroleum has announced an agreement to acquire a 10 per cent stake in an Egyptian concession holding the Mediterranean's largest gas field from Italy's Eni.

"We are pleased to be working with Mubadala and welcome them into the partnership for the Shorouk concession", said Mr Descalzi.

Descalzi said: "Eni is committed to apply its experience in the development and production of world-class oil and gas resources, as well as Eni's technology portfolio, in support of ADNOC's objectives to cost-effectively increase production capacity, efficiently manage the concessions' assets and sustain the plateau through targeted enhanced oil recovery programs, at competitive cost".



Other news