British energy company BP grabs a stake on what may be one of the largest natural gas fields ever discovered. File Photo by Maryam Rahmanian/UPI | License Photo
LONDON, Nov. 28 (UPI) -- British energy company BP said it was strengthening its position in the Egyptian oil and gas market by buying a minority stake in an offshore natural gas field.
Subject to approval from the Egyptian government, BP said it spent $375 million to take a 10 percent concession in the Shorouk complex from Italian energy company Eni. The Zohr gas field, the largest discovery made in the Mediterranean Sea, is within the area in question.
"This interest in a truly world-scale asset will complement our existing Egyptian business," BP CEO Bob Dudley said in a statement.
Eni was granted a development lease for the Zohr offshore field in early 2016. Development is potentially slated to start by the end of next year and production could reach about 500,000 barrels of oil equivalent per day by 2019.
Eni made its initial gas discovery in the Zohr field in mid-2015 and quickly described it as the largest made in regional waters and potentially the largest in the world. A framework deal signed last year between Eni and Egypt's government called for up to $5 billion in total investments offshore.
BP, as part of the agreement, has the option to take on another 5 percent interest before production begins. The British company added that development of Zohr is on a fast track for development.
A subsidiary of oil and gas field services company Schlumberger this year secured a $170 million contract from Belayim Petroleum Co., an Egyptian player known also as Petrobel, for help with the development of the Zohr natural gas field. For BP, the company said it's one of the largest foreign investors in Egypt with approximately $30 billion to date.