Eni reinvigorated by Egyptian gas potential

ROME, July 24 (UPI) -- Italian energy company Eni said it was strengthening its commitment to Egypt following the discovery of significant gas deposits in the Nile Delta.

Eni Chief Executive Officer Claudio Descalzi met in Rome with Egyptian Energy Minister Sherif Ismail and Egyptian Prime Minister Ibrahim Mahlab to update agreements signed in March. The Italian energy company said it was strengthening its commitments following what it described as a "significant" gas discovery in the Nile Delta.

Eni declared a discovery in the Nooros exploration prospect in the Abu Madi West license area, about 75 miles northeast of Alexandria, contained at least 530 billion cubic feet of gas in place.

"The update describes the commitment of the parties to jointly evaluate the development opportunities of the discovery by renegotiating the terms and contract extension of the concession," the Italian company said in a statement.

A framework agreement signed in March calls for as much as $5 billion in investments to exploit Egyptian oil and natural gas reserves. Eni in January signed two new agreements in the deep waters of the Mediterranean Sea following an auction held by the Egyptian government in 2013.

Political and economic instability in Egypt in the wake of the Arab Spring movements left the government in debt to energy companies eager to tap the country's reserve potential.

Eni said its overall investment strategy in Egypt during the next four years will lead to the development of an estimated 200 million barrels of oil and 1.3 trillion cubic feet of natural gas.

"These investments will also contribute effectively to the increasing energy needs of local demand," the company said.

Egypt is the largest oil producer in Africa that's not a member of the Organization of Petroleum Exporting Countries and the largest gas producer. It's also the largest oil and gas consumer in the region, leaving it struggling to support a vibrant energy sector that satisfies domestic demand.