Eni plans to resume exploration activities on Zohr, Egypt’s largest natural gas field, by year’s end.
“After some time, we were not really working on Zohr, we will restart drilling by the end of the year, and we are going to drill another well in 2025,” Claudio Descalzi said on the sidelines of the Adipec energy conference in Abu Dhabi.
The investment is likely to amount to around $160 million, according to Egyptian government officials.
Eni has been operating the Zohr field in Egypt since its discovery in 2015. It accounted for 40 percent of the country’s gas production, but its output fell to less than 20 billion cubic metres – about 40 percent below capacity – leading to an energy crisis.
As a result, Cairo was forced to recommence liquefied natural gas imports to cover domestic demand.
Technical problems and overdue payments to Eni were reported as the main reasons for the slowdown in operations. However, the Egyptian government has started paying outstanding bills, and Eni received around $600 million in payment in mid-September.
Egypt’s president met with the Eni CEO at the end of October to discuss gas operations, as the country plans to restore its natural gas production to normal levels by June 2025. Eni and Egypt also discussed Egypt’s role in developing a gas hub in the eastern Mediterranean.
Karim Badawi, Egyptian minister of petroleum and mineral resources, told the Adipec conference that Cairo wants to leverage its position and infrastructure to export gas from the region.
Eni is also restarting drilling operations in Libya after a 10-year pause, Descalzi said. “We are drilling exploration wells in the Ghadames area, and next year we will go offshore as well. Everything is in good progress.”
Eni operates the area in partnership with BP and the Libyan Investment Authority.
Descalzi said that the market volatility of recent years is hampering upstream investment, and that he expects this to continue in 2025.
Opec is playing a big role in increasing the unpredictability, he said. “As soon as (Opec) said, ‘We’re going to release some production,’ the price went down immediately. Now they are saying they will postpone until the end of the year, and that has made a big impact on the market.
“The volatile situation is not good because we need more energy, and this is not helping investments in exploration and production.”
He said that despite the balance between the demand and the offer, the situation was fragile. “Very soon, the supply is going to suffer, and that means a peak in the oil and gas price.”
Opec+ said on Sunday that it will delay unwinding output cuts by one month, because of weak demand in China and rising supplies out of the group.
The bloc, comprising the Organization of the Petroleum Exporting Countries, Russia, and other allies, was set to boost output by 180,000 barrels per day starting in December.
