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Eni sells 10% stake in Zohr to UAE’s Mubadala for $934 million


Eni sells 10 percent of Egypt’s Shorouk concession to Mubadala Petroleum.

Italian oil company Eni said on Sunday it would sell a 10 percent stake in the Shorouk concession in Egypt’s Zohr gas field to Mubadala Petroleum of the United Arab Emirates for $934 million.

Eni currently holds through its subsidiary IEOC a 60 percent stake in the block, the biggest ever gas discovery in the Mediterranean, with 400 million standard cubic feet per day.

Rosneft holds a 30 percent share and BP 10 percent.

The deal fits with Eni’s so-called ‘dual exploration’ strategy, under which the state-controlled group aims to sell down stakes in fields it operates in order to raise cash to fund future development and support dividends.

“(The deal) represents a further signal about the strength and quality of this world-class asset,” said ENI Chief Executive Claudio Descalzi.

Production at Zohr began late last year and should add 70,000 boe/d (barrels of oil equivalent per day) for Eni this year, Descalzi said last month.

Mubadala Petroleum is entirely owned by Mubadala Investment Company, the Abu Dhabi-based state fund with assets worth over $125 billion. Its chief executive said the deal was “important and attractive”.

On Sunday Eni also signed a 40-year deal with UAE’s Abu Dhabi National Oil Company (ADNOC), awarding it a 10 percent stake in the Umm Shaif and Nasr offshore oil concession and a 5 percent stake in Lower Zakum, for a total participation fee of about $875 million.

In both concessions ADNOC owns a 60 percent stake.

Descalzi said that the agreement was in line with Eni’s expansion strategy and would allow Eni a larger presence in the Middle East.

The oil major is due to present on Friday its 2018-2021 industrial plan, with some analysts expecting the company to unveil an improved dividend policy.

In mid-February the group signaled excellent growth prospects for all its businesses and held out the promise of stronger returns for shareholders after profits more than doubled in the fourth quarter of 2017 and production hit a record high.

Eni sells to Mubadala Petroleum a 10% stake in the Shorouk concession, offshore Egypt.

Eni has agreed to sell to Mubadala Petroleum, a wholly owned subsidiary of Mubadala Investment Company, a 10% stake in the Shorouk concession, offshore Egypt, where Zohr’s super-giant gas field is located. Eni, through its subsidiary IEOC, currently holds a 60% stake, while the other partners are Rosneft with 30% and BP with 10%.

The agreed consideration is 934 million US dollars. The completion of the transaction is subject to the fulfillment of certain standard conditions, including all necessary authorizations from Egypt’s authorities.

The Zohr super-giant gas field was successfully started-up in December 2017, in only 28 months after its discovery, and is currently producing 400 million scf per day. The production will gradually ramp up to reach the plateau by the end of 2019.

Claudio Descalzi, Chief Executive Office of Eni, said: «We are pleased to be working with Mubadala and welcome them into the partnership for the Shorouk concession. This represents a further signal about the strength and quality of this world class asset developed by Eni».

Musabbeh Al Kaabi, Chief Executive Officer of Petroleum & Petrochemicals, Mubadala Investment Company, and Chairman of Mubadala Petroleum said: “This is an important and attractive investment for Mubadala, adding a world-class asset to our portfolio with long-term cash flows. We are joining a strong partnership with Eni as operator, who have delivered the project in record time and with the full support of the Egyptian authorities».

Eni has been present in Egypt since 1954, where it operates through the subsidiary IEOC Production BV. The company is the main producer in the country with an equity production of around 230,000 barrels of oil equivalent per day.

(Sources: Reuters & Eni)