President Abdel Fattah Al-Sisi inaugurated on Wednesday the first stage of the giant Zohr gas field, the largest in Egypt and the Mediterranean, boosting the country’s reserves and production of natural gas.
Al-Sisi pointed out that the maritime demarcation agreement with Cyprus paved the way for Egypt to grant concession areas for international companies in deep waters, in accordance with clear rules and laws that govern areas shared by Egypt and neighbouring countries.
The president praised the efforts exerted by Claudio Descalzi, CEO of Italian energy company Eni which holds a 60% stake in the Shourouk Concession, which includes the Zohr field, stressing that Descalzi was committed to his promise of speeding production from the field, which proved the strength of bilateral relations between Egypt and Italy.
He noted that Egypt used to import $1.2bn worth of petroleum products monthly, due to the decline in local production because of lack of maintenance and development operations in existing fields.
Al-Sisi continued that the Central Bank of Egypt’s reserves of foreign currency have declined severely as a result of the continuous importing of petroleum products.
Meanwhile, Minister of Petroleum and Mineral Resources, Tarek El-Molla, said that the restoration of political and security stability in Egypt has contributed to the signing of 83 new agreements to increase exploration activities.
He added that the support of President Al-Sisi and coordination with Eni and its new partners in the project—BP and Rosenft—were the reasons behind the successful completion of the project in record time.
Zohr is a record-breaking project, as it took only 28 months between its discovery and start of production. It is a unique achievement compared to similar discoveries in the world, which usually take six to eight years.
El-Molla pointed out that Eni produced gas from the Zohr field for the first time in December 2017 at a rate of 350m cubic feet of gas per day. Daily output is set to rise to about 1bn cubic feet in mid-2018 and 1.7bn by the end of the year, he said. The second stage is due to be finalised by the end of 2019, when production should reach 2.7bn cubic feet, representing 50% of Egypt’s gas production.
El-Molla stressed that the importance of the new gas field lies in attracting foreign investments and opening the door for more explorations in the Mediterranean, especially in deep waters, and encouraging international companies to intensify exploration activities in other areas of Egypt.
Eni’s discovery of Zohr will be allocated to satisfy much of the local demand from the state’s different sectors, El-Molla said. The first stage’s gas production (350m cubic feet per day) will lead to decreasing liquefied natural gas (LNG) imports by 25%, saving $720m annually, he added.
The minister added that Egypt will achieve self-sufficiency in the supply of LNG by the end of 2018, saving $3bn annually.
For his part, Descalzi expressed his pleasure to launch the first phase of the project, saying, “we have made a historic achievement in less than two and a half years. We seek to reach the gas field’s maximum production level in the near future as we promised the president.” He added that Eni has injected more than $5m in investments into the project over the last two years.