Italian energy company Eni will sell a 30% stake in its giant Egyptian offshore gas field Zohr to Russia’s Rosneft for $1.575 billion, pressing ahead with asset sales to fund investments and offset weak oil prices.
Eni, which owns 90% of the Shorouk block containing Zohr, said Rosneft would pay $1.125 billion cash for the stake and would reimburse investments already carried out by Eni for around $450 million, Reuters reported.
The deal comes less than a month after Eni’s sale of a 10% stake in Zohr to BP at the same implied price, bringing overall proceeds to around $2.1 billion.
Eni, whose cash flow fell 19% in the third quarter due to low oil prices, pledged at the start of the year to sell €7 billion ($7.43 billion) worth of assets to 2019 -- €5 billion in the first two years.
“This is a great success for Eni to receive $2.1 billion for a year’s work and have major partners to share the risk and capex,” said Bernstein oil analyst Oswald Clint.
Oil prices rose as much as 6.5% on Monday after OPEC and some of non-OPEC producers reached their first deal since 2001 to jointly reduce output, though are still well below values above $100 a barrel seen in 2014.
Selling down stakes in oil and gas fields it operates is part of Eni’s so-called “dual exploration” strategy to raise cash to fund development and support dividends. In the last four years, Eni has raised about $6.3 billion in this way.
Zohr, discovered by Eni in 2015, is the biggest gas field in the Mediterranean with an estimated 850 billion cubic meters of gas in place.
