ENI makes giant discovery in Egyptian waters

ENI announced a giant discovery off Egypt’s shores, the largest field discovered to date in the Mediterranean. The Zohr well, located in 1,450 meters of water in the Shorouk exploration block, could hold up to 30 Tcf, according to the italian company. It covers an area of 100 square km, and is located about 200km off the coast of Egypt. The size is significant, particularly in comparison to the discoveries made in the neighbouring countries: Israel’s largest offshore fields, the Leviathan and the Tamar, hold respectively 22 and 10 Tcf of natural gas. Cyprus’ only discovery to date, the Aphrodite field, holds an estimated 4.54 Tcf of natural gas.

Egypt is struggling to meet domestic demand due to a flat production and a rising demand. Once fully developed the new field could provide some relief to the country’s ongoing energy crisis and lift its economy. ENI is planning an immediate appraisal of the field, to move forward towards its production. The company’s CEO Claudio Descalzi met with Egypt’s President Abdel Fattah Al-Sisi in Cairo on Sunday to discuss the significance of the find. Egypt, once a net natural gas exporter to Jordan and Israel, has been looking to import the hydrocarbon to put an end to its natural gas shortages. The country has been engaged in talks with Israel and Cyprus for the purpose of importing gas from Israel’s largest offshore natural gas fields and Cyprus’ Aphrodite via pipeline.

Egypt’s new discovery could mean natural gas independence for at least a decade to come, if the estimates prove to be accurate. A final investment decision is expected to be taken this year, with drilling expected to follow in 2016. Egypt’s role has been increasingly important in the Eastern Mediterranean region. Israel and Cyprus have been eying the Egyptian market as a potential destination for their newly discovered natural gas. Egypt’s unused export terminals were also being considered by Egypt’s newly natural gas producing neighbours as a potential route to reach export markets. The new find offshore Egypt could however significantly impact Israel and Cyprus’ exports aspirations should Egypt re-enter the export market.

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