Mubadala Petroleum joins Shorouk Block in Egypt through $930m deal with Eni

Energy acquisition news : Abu Dhabi-based Mubadala Petroleum has forayed into the Shorouk Block, an Egyptian offshore concession in the Mediterranean Sea by completing its acquisition of a stake of 10% for $930 million from Italian energy giant Eni.

Through the deal, the Abu Dhabi state-owned Mubadala Investment Company subsidiary, will take part in the supergiant Zohr gas field as well, which is contained in the Shorouk concession.

Having started production since last December, the Zohr gas field is currently being ramped up to yield two billion cubic feet of gas per day (bcfd) of total installed treatment capacity by the end of 2018.

As of now the Zohr gas field production is in excess of 1.1 bcfd and is targeted to have a production plateau of 2.7 bcfd by the end of next year.

Discovered by Eni in August 2015, the Zohr gas field is considered as the largest natural gas field to be ever discovered in the Mediterranean Sea, which is believed to contain up to 30 trillion cubic feet of gas. The Zohr gas field, which is contained in nearly 1,500m deep waters, is located nearly about 190km north of Port Said.

Zohr Gas Project offshore Egypt

The Zohr Gas Project offshore Egypt. Photo: courtesy of Mubadala Investment Company.

Commenting on Mubadala Petroleum’s participation in the Shorouk Block, Bakheet Al Katheeri – Mubadala Petroleum CEO said: “The acquisition of a 10 percent interest in the Shorouk concession with the producing Zohr gas field is a significant portfolio addition for Mubadala Petroleum and marks our entry into Egypt.

“This world-class asset will provide Mubadala Petroleum with increasing future production, and substantial reserves, all of which support our drive for long-term and profitable growth.  At the same time we have joined a world-class partnership with Eni and look forward to working closely with them to deliver the resources to meet growing local energy demand.”

With the transaction with Mubadala Petroleum, Eni now holds a stake of 50%, owned through its subsidiary IEOC. The other partners in the Shorouk Block are Rosneft (30%) and BP (10%).

Claudio Descalzi – Eni CEO, commenting on Mubadala Petroleum’s entry into the Shorouk Block said: “Working alongside significant partners such as Mubadala Petroleum, BP and Rosneft is a further boost for the development of Zohr and underlines the quality of the asset, which will play a fundamental role in supporting Egypt’s goal of achieving energy independence.”

Eni, which originally owned 100% in the Shorouk Block, divested a stake of 10% to BP in last February for $375 million and later on sold a stake of 30% to Russian oil and gas producer Rosneft for $1.125 billion.

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