Production Starts at Egypt's Giant Zohr Gas Field

By MarEx 2017-12-20 18:48:13

Production has started from the giant Zohr gas field, offshore Egypt. The field is operated by Eni, through its joint venture with The Egyptian General Petroleum Corporation (EGPC), and is the largest natural gas discovery yet to be made in the Mediterranean Sea.

The field is located 180 kilometers (110 miles) from Port Said and situated in waters 1,500 meters deep. 20 wells are expected to be drilled by the end of 2019. 

The Zohr gas field was discovered by Eni in August 2015 and is estimated to have a total potential of up to 30 trillion cubic feet of gas in place. Eni through its joint venture Petrobel operates the Shourouk concession that contains the Zohr field. BP completed its purchase of a 10 percent interest in the concession from Eni in February 2017 and Rosneft purchased a 30 percent interest from Eni in October 2017.  

Zohr is one of Eni’s projects which has involved rapid development and production through the company's Dual Exploration Model, adopted by 2013. The approach is based on the principle that while the reserves of hydrocarbons grow through the exploration successes, Eni can benefit from early monetization thanks to the sale of minority stakes, all while maintaining operatorship of the asset. By parallelizing exploration, appraisal and development phases, the time-to-market is quicker, equity development cost are lowered, and Eni achieves an accelerated cash flow. This approach has allowed Eni to generate $9 billion from its exploration activities between 2014 and 2017.

Delivery of first gas from Zohr completes BP’s program of seven upstream major project start-ups in 2017. Zohr follows the earlier start-ups of the Khazzan project in Oman, Persephone in Australia, Juniper and the Onshore Compression project in Trinidad, Quad 204 in the U.K., and the first phase of the West Nile Delta project, also in Egypt.