The Italian Eni will finish drilling the second well in the Zohr field in the Shorouk concession area located in the deep waters of the Mediterranean by the next April, with a cost of approximately $100m.
A prominent official at the Egyptian Natural Gas Holding Company (EGAS), who requested to remain anonymous, said the company aims to complete the drilling of six wells in the Shorouk concession area in 2016.
Eni agreed with the Ministry of Petroleum to start production from the Zohr field in 2017 with amounts reaching 1bn cubic feet of gas daily. The official said the agreement includes increasing the production from the concession area to 2.7bn cubic feet of gas daily in 2019.
The Egyptian General Petroleum Corporation (EGPC) met with Eni to negotiate over the prices of the gas produced. The price is subject to a price equation with a minimum of $4 and maximum of $5.88 per 1m British thermal units, and will not exceed these rates under any circumstances, the official said.
In August 2015, Eni announced the discovery of the Zohr field, constituting the largest gas discover in the deep waters of the Mediterranean, and one of the largest in the world, with reserves of 30tn cubic feet.
The development agreement between EGAS and Eni for the Shorouk concession area includes reserving 40% of the total value of the explored gas to restore the foreign partner’s investments in the project. These investments include exploration and development. The remaining 60% is distributed as 35% to Eni and 65% to the Egyptian government.
According to the agreement signed between EGAS and Eni in 2015, the 40% allocated to restore the foreign partner’s expenditures will go to the government after the investor restores the invested money.
Eni’s investments in the project amount to $7bn to develop the gas exploration in its concession area in the deep waters in the Mediterranean over three years.