Eni SpA discovered a “super giant” natural gas field offshore Egypt in what the Italian oil company said is the largest find in the Mediterranean Sea.
The deep-water deposit in the Zohr Prospect in the Shorouk block may hold 30 trillion cubic feet of gas, equivalent to 5.5 billion barrels of oil, Eni said in an e-mailed statement Sunday. Eni, which wholly owns the license for Shorouk, said the discovery validates its strategy of exploring mature areas. Egypt’s petroleum ministry confirmed the discovery in a separate statement.
“Egypt has still great potential,” Claudio Descalzi, the company’s chief executive officer, said in the statement. “This historic discovery” will transform the energy industry in Egypt, he said.
International oil and gas companies are seeking new deposits as existing fields become depleted. Egypt’s energy demand is rising as the Arab world’s largest population grows, making the country more reliant on imports provided by Persian Gulf states. The latest discovery will contribute to Egyptian supply for decades, Eni said.
Export Plans
“A find of this size should be enough to cover a lot of Egypt’s energy gap,” Robin Mills, a Dubai-based analyst at Manaar Energy Consulting, said by phone Sunday. “They’ll likely have to meet domestic needs first, before any export plans are discussed. This will also put a damper on Israeli plans to export gas to Egypt.”
Eni will likely sell most of the fuel into Egypt’s domestic market, said a spokesman, asking not to be identified citing company policy. With a minimum development period of at least four years, it would be about 2020 before any production started in the Shorouk block, Mills said. Eni said it planned to appraise the field and start “fast track development.” It didn’t provide a time line for the project.
Companies including Noble Energy Inc., which are developing gas fields in Israel, have been pushing plans to export the fuel to Egypt since the start of the year. Delek Group and partners in the Tamar field signed an export contract with Egyptian buyers in March.
Eni is looking to divest some of its peripheral businesses as a drop in global oil prices puts pressure on earnings. The company has asked advisers to look at options for assets including interests in Nigerian oil and gas fields. In March, Eni became the first major oil company to announce a dividend cut after prices slumped.
Gas Venture
Egypt is the first foreign country Eni expanded into from its home base in Italy in 1954. The Rome-based company already produces gas in Egypt and is a partner in a venture operating a gas liquefaction terminal at Damietta on the Mediterranean coast.
Descalzi, who became CEO a year ago, met Egyptian President Abdel-Fattah El-Sisi along with the country’s prime minister to discuss the discovery on Saturday in Cairo, according to the Egyptian petroleum ministry statement.
Descalzi led Eni in its largest natural gas find at the Mamba field in Mozambique, where the company has found 75 trillion cubic feet of gas in the offshore deposits of its Area 4
coffeeguyzz on Sun, 30th Aug 2015 12:50 pm
A lot of hoopla over 30 trillion cubic feet, which is the same amount that Wrightstone Energy estimates is recoverable from the Burket and Geneseo formations which lie above the Marcellus.
The leading developer of the Burket, EQT, recently announced that they will shun further development of this formation and target the deeper, far larger Utica.
rockman on Sun, 30th Aug 2015 5:30 pm
I’m not sure what the point is comparing the Eni discovery to any or all US shales. The two situations are so different in every aspect I won’t waste everyone’s time pointing out the very obvious.
Jimmy on Sun, 30th Aug 2015 8:25 pm
It will take a few years to begin producing. See if Egypt lasts that long. They ceased oil exports in 2010 once consumption exceeded production. They’ll become a NatGas importer this year as their consumption of NatGas is about to exceed production. They are banning rice exports in September. I can’t imagine how they plan to earn money with which to buy imports like wheat. I can’t think of any foreign market that would take Egyptian Pounds in exchange for grain. They’re gonna have to find some hard cash somewhere and I think Egypt will be long down the road to failed statehood before this NatGas find produces a cubic foot.
Hello on Mon, 31st Aug 2015 7:31 am
Egypt can always export its surplus population to earn hard cash. And I’m sure the West is stupid enough to import them wholesale.
joe on Mon, 31st Aug 2015 8:14 am
No thanks. We’re all stocked up on crazy here.
They may have suicide belts, but if they saw the Republican presidential debates, they would say we are punished enough.
Kenz300 on Mon, 31st Aug 2015 9:13 am
Every country needs to develop a plan to become more energy independent and self sufficient.
Wind and solar energy production provide the opportunity to do that.
Fossil fuels are cooking the planet…… the sooner we transition away from fossil fuels and move to alternative energy sources the better.