25 Jul 16 – Eni [BIT:ENI], the Italian major, is in talks with six bidders to sell up to 50% of its Zohr gas field in Egypt, a source close to the situation and two bankers familiar with deal said.
The deal is worth up to USD 4bn, and all of the bidders are majors or super-majors, the source added.
Elsewhere in Egypt, Eni, through its subsidiary IEOC, holds a 50% stake in the license of Baltim South venture with BP [LON:BP], according to the company website. BP is also the majority owner of the nearby West Nile Delta project.
A lot of the value depends on the development programme, as there is also an idle LNG asset and a lot of work to do, one of the bankers said. But it is a big and attractive asset, the banker added.
Eni confirmed to Mergermarket that it hopes to secure a stake sale of Zohr by 2017.
Eni has not mandated financial advisers and is using an in-house team for the deal. This is because the company has strong relationships with all of the bidders, the source said.
The deal is targeted to be completed by April 2017, the source said.
The discovery of Zohr was announced in August 2015. It holds 30 trillion cubic feet (tcf), making it the world’s fifth largest gas field.
Egypt expects it to be a game-changer for its energy security, a government source noted. At present the country is heavily reliant on LNG imports. Egypt’s natural gas industry has suffered setbacks in recent years, due to under-investment in upstream assets, political unrest and regulatory uncertainty.
It had previously been reported that analysts expected Eni to sell about 20% of Zohr.
The Egyptian government would not agree to Eni exporting the gas from Zohr, and this is why the company is looking to sell a large stake in the project. Gas sold domestically in Egypt is priced at a discount to the market.
Eni, has previously announced it is targeting EUR 7bn in asset disposals by 2019. The company has a market capitalisation of EUR 49.4bn.
by Katie McQue & Patrick Harris