Cyprus Awards 'Confirm Eni's East Med Strategy': Descalzi

Eni commented December 22 on the two exploration blocks offshore Cyprus awarded the day before in the country’s third licensing round.

It was awarded both as operator: block 6 will be held 50-50% with Total, while Eni will have a 100% interest in block 8.

Eni said the areas have geological affinities with those successfully explored by Eni offshore Egypt, with the discovery of the Zohr super-giant gas field.

CEO Claudio Descalzi noted that the awards “confirm the effectiveness of Eni’s exploration strategy, which keeps acquiring significant shares and uses the knowledge base resulting from the intense activity related to [Egypt’s] Zohr field. It is another step towards a possible future definition of a powerful hub for natural gas in the Eastern Mediterranean, which could play an important role in the future energy security of the area, as well as potentially in Europe’s energy security.”

Eni CEO Claudio Descalzi (Photo credit: Eni)

In addition to blocks 9, 3 and 2 awarded to Eni under Cyprus’ second licensing round in 2012, the Italian major also has three blocks on the Egyptian side: Shorouk (where Zohr with 30 trillion ft³ of gas in place is located), Karawan (where Eni has a 50% stake) and North Leil (Eni 100%).

Last week Eni announced deals whereby it would reduce its 100% Shorouk/Zohr interest to as low as 50%, by farming out stakes to Rosneft and BP.

Rosneft said that, were it to exercise its full option to acquire a 35% interest, it would expect to invest $4.5bn over a four-year period. That would broadly tally with Eni's previous hints that the full-field cost for exploring and developing Zohr could work out at some $12bn.

Mark Smedley