Eni signed two concession agreements for the acquisition of a 5 percent stake in the Lower Zakum offshore oil field and a 10 percent stake in the oil, condensate and gas offshore fields of Umm Shaif and Nasr, the company announced in Abu Dhabi on Sunday.
According to the announcement, the agreements consist of a total participation fee of about $875 million for a 40-year duration.
The agreements represent a strategic move for Eni in gaining access to a country with hydrocarbons reserves that are among the largest in the world.
Lower Zakum is located about 65 kilometers off the coast of Abu Dhabi. The discovery dates back to 1963 and production began in 1967.
"It has a target production of 450,000 barrels of oil per day. Umm Shaif and Nasr are located about 135 kilometers from the coast of Abu Dhabi and have a target production of 460,000 barrels of oil per day," according to the agreement.
In both concessions, Abu Dhabi National Oil Company (ADNOC) owns a 60 percent stake while the operator is ADNOC Offshore.
In addition, Eni agreed to sell a 10 percent stake in the Shorouk concession offshore Egypt, where Zohr's super-giant gas field is located, to Mubadala Petroleum, a wholly owned subsidiary of Mubadala Investment Company.
Eni, through its subsidiary IEOC, currently holds a 60 percent share, while other partners Rosneft holds a 30 percent interest and BP has a 10 percent stake.
The agreed consideration is $934 million. The completion of the transaction is subject to the fulfillment of certain standard conditions, including all the necessary authorization from Egypt's authorities.
By Gulsen Cagatay