Russian energy major Rosneft is to pay Italy’s Eni $1.125bn for a 30% stake in Egypt’s offshore Zohr gas field, it announced today. Eni will retain a 60% stake in the 231km² field with recoverable reserves of over 850bn m³, with BP keeping hold of the remaining 10%. Both BP and Rosneft have an option on the purchase of an additional 5%, and Rosneft will also pay Eni $450m in compensation for costs incurred since the field was discovered in 2014.
The deal represents Rosneft’s first venture into the international LNG market. Located 190 km north of Port Said at a depth of approximately. 1.5 km, commercial gas production is scheduled to begin by the end of the year and, while it will initially only supply Egypt’s domestic market, Rosneft will eventually be able to use Egypt’s two LNG plants for export purposes.
Earlier this year, Rosneft stated its intention to supply gas to Europe and the Zohr deal is line with that goal. “Participation in the development of a unique production asset will strengthen the position of Rosneft in the strategic markets of Europe and Middle East,” the company said in a statement.