(Adds CEO comments, broker)
By Stephen Jewkes
MILAN Nov 28 Italian oil and gas company Eni
is in talks with various parties to cut its stake in
the giant Zohr gas field offshore Egypt to 50 percent, Chief
Executive Claudio Descalzi said on Monday.
The company, which owns the whole concession area that
includes its Zohr discovery, agreed last week to sell a 10
percent stake to BP for $375 million.
BP, which has an option to buy another 5 percent, will also
reimburse Eni for around $150 million of past costs.
"We believe we can operate the field with 50 percent, that's
my objective," Descalzi said on the sidelines of an industry
Zohr, discovered by Eni in 2015, is the biggest gas field
ever found in the Mediterranean with an estimated 850 billion
cubic metres of gas in place.
The approval process for development of the field was
completed in February and first gas is expected by the end of
Descalzi said Eni was talking to a series of groups about
the sale of further stakes.
"This could happen fairly quickly. In our business that
could also mean a few months," he said.
Bank of America Merrill Lynch analysts said in a note the
$525 million capital injection Eni had received from the Zohr
deal was viewed as good news for the company.
"It helps to cover the dividend in the short term and is
evidence that Eni can execute disposals after the failed sale of
(chemical unit) Versalis earlier in the year," the bank said.
Eni, whose cash flow fell 19 percent in the third quarter,
is committed to selling 5 billion euros ($5.30 billion) of
assets in the next two years to help fund investments.
Besides Zohr, Eni also intends to sell a stake in its giant
Area 4 gas field offshore Mozambique where it holds an indirect
Descalzi said a decision on Mozambique was "ripe" but added
permits and bureaucracy were slowing things down.
"I would be happy if we had something to announce at the
next strategy meeting," he said. Eni usually gives an annual
presentation on its strategy in the first quarter of the year.
Sources have said Exxon Mobil has already clinched a
deal to buy a stake in the Area 4 concession but an announcement
would not be made for several months.
Merrill Lynch said it believed a sale of up to 25 percent of
Area 4 could be announced by the end of this year and raise
close to $2.5 billion.
In 2013 Eni sold 20 percent of its Area 4 licence to China's
CNPC for $4.2 billion but since then oil and gas prices have
come down by more than half.
($1 = 0.9438 euros)
(Reporting by Stephen Jewkes; Writing by Agnieszka Flak;
Editing by Greg Mahlich)