Next week will witness the signing of an agreement to establish the company of Petro Shorouk, a joint venture between Egyptian General Petroleum Corporation (EGPC) and Eni S.p.A., an Italian multinational oil and gas company with headquarters in Rome.
A senior official from the Ministry of Petroleum said in a special statement to Daily News Egypt that after the finalisation of its formation, there will be a general assembly held for all members and shareholders of Petro Shorouk to announce the investment plan for the Zohr field during the upcoming fiscal year (FY).
Petrobel will carry out search and development operations on lf of Shorouk in agreed upon deep water areas. The official pointed out that a second exploratory well is being drilled at the Zohr field in the Mediterranean. EGPC agreed with Eni to commence production in the Zohr field in 2017, with quantities that will reach 1bn cubic feet of gas per day.
Head of EGPC Mohamed Al-Masry said in earlier statements that the agreement includes increasing production to 2.7bn cubic feet of gas per day in 2019.
EGPC held a meeting with Eni on Saturday to negotiate the price of the extracted gas per British Thermal Unit (BTU). The price must range between a minimum of $4 per million BTUs and a maximum of $5.88 per million BTUs and it cannot exceed this limit at all.
In August 2015, Eni announced the discovery of the largest gas field in Egyptian Mediterranean deep waters: the Zohr field, with reserves of 30tr cubic feet.
The agreement for developing the Shorouk concession area, signed between the Egyptian Natural Gas Holding Company (EGAS) and Eni, included setting aside 40% of the value of the total gas discovered so as to recover the foreign partner’s investment in the project, which includes search and development. The remainder, being 60% of the total production, will be distributed as follows: 65% to the Egyptian government and 35% to Eni.
The foreign partner’s percentage is returned to the Egyptian government after the investments are met, in accordance with the agreement signed between EGAS and Eni in 2015.
Eni’s investments in the project amount to $7bn for three years of development in the Zohr gas field in the Mediterranean.