The Italian company Eni has completed digging an additional well to the set plan for the development of Zohr field in the Mediterranean. The well is to be linked to production in the project’s second phase.
A source at the Egyptian Natural Gas Holding Company (EGAS) told Daily News Egypt that the company plans to sell 10% of its stake in Zohr, dropping its share to 50%.
He pointed out that the development agreement with Eni allows it to sell part of its stake, but the new owner will not have any official status in EGAS contracts.
He explained that the company sold 40% of its share to BP and Rosneft to participate in securing investment for the project, which is estimated at $12bn, and up to $16bn by 2020.
Eni had approved selling 30% of its stake in Shorouk concession to Russia’s Rosneft in exchange for $1.125bn, and $450m for the investments it previously carried out.
Eni also sold 10% of its share to BP for $375m, in addition to paying a $150m share of previous expenditures.
A press release issued by Eni noted that Rosneft and BP have the option to buy an additional stake of 5% each.
The source at EGAS said Eni has finished digging all wells agreed upon in 2016 and is currently implementing production facilities to process the produced gas in Port Said.
The estimated cost of drilling one well in Zohr field is estimated at $100m.
The Shorouk Concession Development Agreement stipulates that Eni set aside 40% of the total value of gas produced to pay back for the foreign partner investments, including research and development.
The remaining 60% value is distributed among the government and Eni, 65% and 35% respectively.
The 40% repayment value will be provided to the foreign partner after finalising its investments, according to the agreement between EGAS and Eni.