Mubadala Petroleum snaps 20% stake from Italian Eni in Egypt's offshore block

The deal is the Abu Dhabi company's second foray into the North African country

Mubadala Petroleum has agreed to acquire a minority stake from Eni’s share in one of Egypt’s offshore exploration concessions. Courtesy Mubadala

Mubadala Petroleum has agreed to acquire a minority stake from Italian energy company Eni’s share in one of Egypt’s offshore exploration concessions, its second acquisition in the North African country.

The company, a subsidiary of Abu Dhabi’s strategic investment firm Mubadala Investment Company, will control 20 per cent of Egypt’s Nour North Sinai Offshore Area concession, which Eni operates through its subsidiary IEOC, Mubadala Petroleum said in a statement on Monday.

In co-operation with Egyptian Natural Gas Holding Company, Eni holds an 85 per cent interest with its partner Tharwa Petroleum Company, which holds a 15 per cent stake in the offshore block.

“This investment enables Mubadala Petroleum to further expand our position in Egypt while deepening our strategic partnership with Eni, the operator of both the Shorouk and Nour concessions,” said Musabbeh Al Kaabi, chief executive of Petroleum & Petrochemicals at Mubadala and chairman of the Mubadala Petroleum board.

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“This exploration block complements our existing investment in Zohr, supports our growth strategy in Egypt and holds the potential to unlock an additional resource base that could add to our business in the longer term.”

The company first entered North Africa’s biggest economy in June, when it acquired a 10 per cent participating interest in the Shorouk concession from Eni, which contains the producing Zohr gas field.

The deal is subject to conditions, including receiving approvals from the relevant Egyptian authorities, according to the statement.

The Nour exploration block is located approximately 50 kilometres offshore in the Eastern Mediterranean, in water ranging from 50 to 400 metres in depth, covering a total area of 739km.

Eni and Tharwa are carrying out drilling of the exploration and overseeing the first exploration period of the Nour concession, it added.

Mubadala Petroleum manages assets and operations spanning 10 countries with a geographic focus on the Middle East, Russia and South East Asia. The Abu Dhabi company's current average production is around 360,000 bpd of oil equivalent.

Mubadala Petroleum and Russian Direct Investment Fund in May formed a joint venture with Gazprom Neft-Vostok to develop several oilfields in Russia. In its first foray into the Russian market, the company and RDIF, the country's sovereign wealth fund, are acquiring a 49 per cent equity stake in Gazprom Neft-Vostok, the operator of the oilfields in Western Siberia, they said in a joint statement at the time.

The company in April signed a production sharing contract for Andaman I in Indonesia, which was awarded by Jakarta in a 2017 licence round. Mubadala Petroleum is the operator of Andaman I and a partner in Andaman II, operated by UK's Premier Oil. The two adjacent fields are located in the under-explored North Sumatra basin offshore Aceh, a region where Mubadala Petroleum has been active since 2011 through joint study agreements.