Petro Shorouk, the subsidiary of Petrobel, which will be tasked to complete the first stage of development of the Zohr Field by the end of 2017, is near official formation, Daily News Egypt reports. The drill ship Saipem 10000 arrived at the field in late December to begin the process of drilling at the Zohr-2 Well.
Petrobel currently has a production rate of 112,000b/d of crude oil and condensate, and 880mcf/d of natural gas. Production of the field is expected to be 2.7bcf/d of gas by 2019. The Zohr gas field, the biggest in the Mediterranean, was discovered by Eni in August 2015.
According to Daily News Egypt, the agreement between Eni and the EGPC says that the price for gas produced will be linked to an equation with a minimum price of $4 per million British Thermal Units (BTUs) and a maximum of $5.88 per million BTUs. The agreement, which will be renegotiated in 2019, requires all gas to go to the Egyptian domestic market, allowing exports only for excess gas.
The Shorouk concession agreement signed between Eni and the Egyptian government calls for 40% of revenues to go towards recovering the investment in the fields. Eni’s repayment value will cover its $7b investments in Zohr over three years. The remaining revenues will be split between Egypt, which will receive 65%, and Eni, which will receive 35%.