Petrobel is nearing the official formation of Petro Shorouk, the company’s subsidiary that will be tasked with completing the first developmental phase of the Zohr natural gas field before the end of 2017.
The Italian Eni discovered Zohr field in August. It is considered the largest natural gas discovery in the Mediterranean Sea. Eni expects the field will help Egypt meet its gas needs for decades in the future.
The field reserves are estimated at approximately 30tr cubic feet of gas. Egypt’s current daily production of natural gas amounts to about 4.5bn cubic feet, which falls below current domestic.
The drillship Saipem 10000 arrived at the planned site of the Zohr-2 well, where it will soon begin drilling. Hassan said Petrobel’s production is currently at a rate of 112,000 crude oil and condensated barrels per day and 880m cubic feet natural gas daily.
Egyptian General Petroleum Corporation (EGPC) CEO Mohamed Al Masry said the deal with Eni includes increasing production to 2.7bn cubic feet of gas daily by 2019.
EGPC held a meeting with Eni to negotiate the price of the extracted gas. The price is subject to an equation in which the minimum price is $4 for the 1m thermal units and the maximum is $5.88. The price will not exceed this level , he said.
Al-Masry said EGPC and Eni agreed to revisit the price of gas produced from Zohr field two years after the date of the commencement of production, in 2017.
The Ministry of Petroleum sent an official letter to Eni to inform it that it is not allowed to export abroad any amount of gas produced from Zohr.
Al-Masry said the agreement stipulates that all production from the Zohr field must be allocated to the local market. However, in case there are amounts exceeding the local consumption, the company could be allowed to export.