Eni confirms oil and gas deals with Abu Dhabi valued at $1.8 billion
The Italian based major, Eni SpA has confirmed agreements to commence oil exploration at two oil blocks off the coastline of Abu Dhabi as well as acquiring a stake in Egypt’s giant Zohr natural gas field. The combined agreement has been valued at $1.8 billion.
Abu Dhabi National Oil Co. confirmed that Eni would receive a 10% share in the Umm Shaif and Nasr oil fields in the Persian Gulf for a payment of just under $600 million dollars. Eni will also gain a 5% share in the Lower Zakum field, worth an additional $300 million dollars.
The government operated Mubadala Investment Co. also confirmed they would pay Eni over $900 million for a 10% stake in Egypt’s Shorouk concession which includes the Zohr gas field in the Mediterranean.
The new 40-year term contract with Abu Dhabi will provide long-term access to crude oil and allow Eni to expand its business in the region. In addition to its giant offshore project in Egypt, Eni also produces oil and gas in Libya and additional oil in Iraq.
Abu Dhabi consists of the most of the crude oil supplies in the UAE. Recently the region divided an offshore production concession into three separate blocks, with Eni being the fourth international business to gain agreements in these areas.
Abu Dhabi is interested in expanding its focus on gas as a vital source of power generation. The region is interested to collaborate with businesses that can support this plan and contribute technology to expand their refining capacity considerably.
Abu Dhabi National Oil Company (ADNOC) are planning to offer projects for investment later this year and also will include bids for new exploration areas. Claudio Descalzi, the CEO of Eni emphasised that additional support provided by Eni would give extra value to the assets available to ADNOC.
Whilst Eni has a strong presence in North Africa, it lacks much exposure in the Middle East. According to industry experts, ADNOC is keen to find a mix of partners, from the major businesses in oil-importing countries such as India as well as businesses that have the technology and project skills to support their development plans.
Abu Dhabi is making plans to increase their output capacity of oil to close to 3.5 million barrels daily by the end of 2018. ADNOC claim they can currently pump close to 3 million barrels each day, with nearly half of this figure coming from offshore deposits.
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