BP and Eni set their cap on stepping up Mediterranean oil & gas game

Two European energy giants, the UK-headquartered BP and Italy’s Eni, have signed on the dotted line to pursue hydrocarbon exploration activities in the Mediterranean Sea, which will lend Egypt a helping hand in augmenting the Middle Eastern country’s oil and gas production volume.

While revealing its recent incentive agreement, which aims to enhance hydrocarbon exploration activities, Egypt’s Ministry of Petroleum and Mineral Resources explained that the deal was inked between the Egyptian General Petroleum Corporation (EGPC), Egyptian Natural Gas Holding Company (EGAS), and Eni and BP to initiate exploration activities in the Mediterranean.

This is aligned with Egypt’s agenda to stimulate investment in hydrocarbon exploration and field development from July 2024, encompassing the drilling of 586 oil and gas wells by 2030. BP has taken several steps to bolster its asset portfolio in this country, including the agreement to form a new joint venture (JV) with ADNOC, known as the BP-XRG JV.

After Eni drilled one well a few weeks ago with Saipem’s rig, the Italian giant confirmed plans to start drilling the Zohr 13 well, which is expected to contribute 55 million cubic feet of gas per day, based on engineering studies, strengthening the local production system.

Karim Badawi, Egypt’s Minister of Petroleum and Mineral Resources, who sees the latest agreement as a new step toward maximizing production and leveraging promising offshore resources, and Martina Opizzi, Head of North Africa and the Levant Region at Eni, witnessed the signing of the deal, said to come with incentive terms, at the ministry headquarters in New Alamein.

Under the terms of the agreement, drilling activities will be conducted at an exploration well in the Temsah concession area in the coming months, as part of efforts to advance natural gas exploration plans and boost the potential for more discoveries.

Following the signing of the deal by Salah Abdel Karim, CEO of EGPC; Yassin Mohamed, Chairman of EGAS; Francesco Gaspari, General Manager of Eni Egypt; and Wael Shaheen, BP’s Regional Vice President in Egypt; Badawi emphasized that the agreement’s focus was on boosting domestic oil and gas production and meeting citizens’ needs by intensifying exploration activities in promising offshore areas.

The signing was attended by Moataz Atef, Undersecretary of the Ministry for the Minister’s Technical Office and Official Spokesperson; Ahmed Abdo, EGPC Vice President for Agreements; Ahmed Kamal, EGPC Vice President for Exploration; and Mahmoud Aboul-Yazid, Head of External Relations at Eni.

The minister pointed out that the Temsah concession area was the result of a long-standing collaboration between EGPC, EGAS, and their partners, along with advanced technical work and accumulated expertise.

Badawi stressed the importance of leveraging Eni and BP’s technologies to unlock new resources that would benefit Egypt and all stakeholders involved. This comes months after Egypt launched a licensing round for seven undeveloped fields in the Mediterranean Sea, three offshore exploration areas in the Gulf of Suez, and three onshore exploration areas in the Western Desert.

Aside from Eni and BP, other players are also expanding Egypt’s hydrocarbon arsenal, including Shell, whose affiliate, BG International, recently took a final investment decision (FID) to develop a gas discovery in the Mediterranean Sea.

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