Mubadala buys 10% stake in Egyptian Shorouk concession from Eni

Offshore concession holds Zohr gasfield, nation’s biggest gas discovery

Mubadala Petroleum and Italy’s Eni signed an agreement to purchase a 10 per cent stake in the Egyptian Shorouk Concession. The agreement was signed by Khaldoon Al Mubarak, group chief executive of MubShow more

Mubadala Petroleum purchased a 10 per cent stake in an Egyptian concession holding the Mediterranean's biggest gas discovery from Italy's Eni, marking the Abu Dhabi hydrocarbons company's first foray into the Arab world's most populous nation.

Financial terms of the stake purchase in the Egyptian Shorouk Concession, which includes the huge Zohr gasfield, Egypt’s largest, were not disclosed. Media reports valued the agreement at $934 million.

The agreement was signed by Khaldoon Al Mubarak, group chief executive of Mubadala Investment Company, on behalf of Mubadala Petroleum, and Claudio Descalzi, chief executive of Eni.

“This is an important and attractive investment for Mubadala, adding a world-class asset to our portfolio with long-term cash flows,” said Musabbeh Al Kaabi, chairman of Mubadala Petroleum and chief executive of petroleum and petrochemicals at Mubadala Investment Company.

“We are joining a strong partnership with Eni as operator, who have delivered the project in record time with the full support of the Egyptian authorities. This is an investment in Egypt in a project that will help meet the country’s growing energy demand while it is reshaping the energy sector and opening new opportunities across the full energy value chain.”

Eni, which will have a 50 per cent stake in the concession after the sale to Mubadala Petroleum, is the operator of the offshore concession. BP has a 10 per cent stake and Rosneft has a 30 per cent interest in the concession.

Eni discovered the Zohr gasfield, which holds up to 30 trillion cubic feet of gas, in August 2015. The field, which started production in December 2017, is about 190 kilometres north of Port Said in waters approximately 1,500 metres deep.

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The transaction is subject to approval from relevant Egyptian government authorities, Mubadala Petroleum said.

“We are pleased to be working with Mubadala and welcome them into the partnership for the Shorouk concession,” said Mr Descalzi. “This represents a further signal about the strength and quality of this world-class asset developed by Eni.”

In November, Mr Kaabi said that Mubadala was planning to increase its investment in petrochemicals because of cheap natural gas prices.

Mubadala’s petroleum and petchems portfolio is valued at $41 billion and represents about 30 per cent of the company’s total holdings. The company is the world’s fourth-largest producer of polyethylene in the world.

In addition to foreign investments that include Austria’s Borealis and Canada’s Nova Chemicals Corporation, Mubadala is working with Adnoc to expand the state-owned oil company’s petchems facility at Ruw­ais in the Western Region of Abu Dhabi.