ENI's Growing Presence in the Eastern Mediterranean
Eni has been awarded two new exploration licenses offshore Egypt, North El Hammad and North Ras El Esh, as a result of a competitive bid round. Eni has been awarded a 37.5% participating interest and operatorship in North El Hammad, where it partners with BP (37.5%) and Total (25%), and a 50% participating interest in North Ras El Esh, where it partners with BP (50%) which will act as operator, according to a press release by the Italian company. The two blocks, which will be managed by Eni’s subsidiary IEOC, are in the shallow waters of the Mediterranean Sea, facing the Nile Delta and located southwest of the Temsah area and west of the Baltim area, where Eni operates existing fields and production facilities.
The new concessions strengthen ENI’s presence in the Eastern Mediterranean. End of August, the Italian company announced a giant discovery off the Egyptian coast. The Zohr field, located in the Zohr field in close vicinity to Cypriot waters, is estimated to hold up to 30 Tcf of natural gas. The size of the discovery means that the field may be the solution for Egypt’s ongoing energy worries. The expected production date is 2020. The country has been looking for potential suppliers of natural gas. It has been eying the Israeli and Cypriot newly gas fields as a short term solution to address its natural gas shortages. Should the deals be sealed, importing gas from Israel and Cyprus via an undersea pipeline could help Egypt solve its natural gas shortages in the short-term.
ENI is also involved in Cypriot waters. Despite two unsuccessful previous attempts to encounter natural gas off the island’s coast, the Italian company’s giant success in Egyptian waters, and in very close vicinity to Cyprus’ maritime zone, is a great boost of confidence that not only reaffirms ENI’s strong presence in the Eastern Mediterranean, but also Cyprus’ significant potential. Cyprus has the ambition to enter export markets. The sale of its offshore riches could lift its economy still suffering from the 2013 financial crisis.
Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. Karen is also a co-founder of the Lebanese Oil and Gas Initiative (LOGI). She holds an LLM in Commercial Law from City University London and a Bachelor of Laws from Université Saint Joseph in Beirut. Email Karen karen@minoils.com Follow her on Twitter: @karenayat