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.

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.

Source: Reuters