BP to buy 10% stake in giant Egyptian gas field

BP has agreed to buy a 10% stake in a giant offshore gas field in Egypt. The company paid $375 million (£297.9m) for the share of Eni’s Shorouk Concession, which includes the Zohr gas field. […]

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By Jonny Bairstow

BP has agreed to buy a 10% stake in a giant offshore gas field in Egypt.

The company paid $375 million (£297.9m) for the share of Eni’s Shorouk Concession, which includes the Zohr gas field.

It is believed to be the largest gas discovery in the Mediterranean, containing an estimated 850 billion cubic metres of gas.

It was discovered in August 2015 by Eni, which has until now been the sole owner and operator.

The field will help remedy Egypt’s energy shortage and is expected to save the country billions of dollars that would otherwise be spent on energy imports.

On closing the deal, BP will reimburse Eni for past expenditure from their share, amounting to roughly $150 million (£119.2m). It also has the option of buying a further 5% under the same terms before the end of 2017.

The deal will provide Eni with money needed for its €5 billion (£4.20bn) divestment plan to continue investing and paying dividends despite weak oil prices.

The purchase still needs approval from the Egyptian Government. Assuming this goes ahead the project will be completed in the second quarter of 2017, with gas being produced shortly after.