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Eni to up its Egypt operations next year: Italian Energy giant Eni plans to drill two new wells in the Zohr field in 2H 2025 with investments of USD 160 mn, an unnamed government official reportedly told Asharq Business. The company is currently conducting geological studies ahead of resuming drilling in the Shorouk concession where the Zohr field is located, the source added.
Egypt’s recent clearing of oil and gas arrears may have played a role: An Eni delegation was in town last week, where it met with newly-appointed Oil Minister Karim Badawi and unveiled plans to drill new wells in its Egyptian concessions. This came shortly after the news that Egypt had cleared USD 1.3 bn worth of arrears to foreign oil and gas companies operating in the country at the end of June, amounting to around 20% of its outstanding dues. Earlier in the year, the Oil Ministry had quelled rumors that Eni had quit operating in Zohr because of unpaid arrears.
Remember: The Zohr gas field, understood to be the Mediterranean’s largest-ever find and Egypt’s largest gas field, was once expected to turn the country into a leading regional and international natural gas exporter. However, the field has seen production decline from a peak of 2.76 bn cubic feet per day in 3Q 2021 to below 2 bn cf/d in the past six months, the regional business outlet reports.
Eni has had an on-again, off-again relationship with Egypt over the last few years: The Italian company’s plans to drill new wells follows earlier reports that it had slowedexploration operations in Egypt — Eni’s production in the country dropped by 11.7% y-o-y by the end of the 1Q 2024. And before this in September of last year, Eni announced that it would invest USD 7.7 bn with its partners over the next four years to expand its Egypt operations.
Eni’s appetite for its Egypt operations is a big deal for our energy sector: Eni, along with its partners, is responsible for producing around 60% of Egypt’ natural gas. It also owns 50% of the Damietta LNG plant, one of the country’s two liquefaction facilities that are key to the government’s increasingly long-term export ambitions.
DATA POINT- Eni has invested some USD 39 bn in Egypt since it kicked off operations here — USD 13.5 bn of which were spent on developing the Zohr field, according to a statement.
