One of Europe’s biggest oil and gas companies has discovered what it called a “supergiant” gas field off the coast of Egypt, the largest in the Mediterranean, in a breakthrough that will affect the UK-listed companies operating in the country.
The Italian group Eni said yesterday that its Zohr prospect “could become one of the world’s largest natural-gas finds” and would make a major contribution to Egypt’s natural gas demand for decades.
The discovery, in deep water in the Shorouk block, could hold 30 trillion cubic feet of gas, or the equivalent of 5.5 billion barrels of oil, Eni said.
By comparison, there is estimated to be 22 billion barrels of oil and gas still in Britain’s North Sea areas, according to the website of Oil & Gas UK, the industry body.
Discoveries have become more remarkable of late, dropping to their lowest in at least two decades last year, because of the increasing costs of exploring in more difficult areas, and the oil majors running down their reserves.
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Claudio Descalzi, chief executive of Eni, who travelled to Cairo to update Abdel Fattah al-Sisi, the Egyptian president, said the “historic discovery” would transform the energy landscape in Egypt.
“Our exploration strategy allows us to persist in the mature areas of countries which we have known for decades and has proved to be winning, reconfirming that Egypt still has great potential.”
Egypt has been a tough region for energy companies because of political uncertainty and terrorism.
BG, which generates about 10 per cent of production and 6 per cent of earnings from Egypt, has struggled against the authorities diverting gas to the domestic market and delaying payments. BP announced a $12 billion gas field investment in March through a partnership with RWE Dea, a deal renegotiated with Egypt after the Arab spring.
Malcolm Graham-Wood, an independent oil analyst and blogger, said the discovery could be a “big plus” for companies, such as BG that have “stuck it out there”.
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“After all BG went for a long time putting what the Egypt government owed them on the tab. Local gas prices are good and there is plenty of interest of what is now called the greater Mediterranean area,” Mr Graham-Wood said.
Eni, which has been operating in Egypt since 1954 through its IEOC subsidiary, holds a 100 per cent interest in the Shorouk block and is the operator of the concession. It is the main producer in the country, extracting 200,000 barrels of oil equivalent daily.