CAIRO • Italian oil company Eni has discovered a "super giant" natural gas field off Egypt's shore in what it said is the largest find in the Mediterranean Sea.
The deep-water deposit may hold 850 billion cubic m of gas, equivalent to 5.5 billion barrels of oil, Eni said in an e-mail statement on Sunday. It said the discovery validates its strategy of exploring mature areas. Egypt's Petroleum Ministry confirmed the discovery in a separate statement.
"Egypt has still great potential," Eni chief executive Claudio Descalzi said in the statement. "This historic discovery" will transform the energy industry in Egypt, he said.
The company will start drilling more wells and installing pipelines next year and may see the first "fruits" of the project around 2018, Mr Descalzi said in an interview with Italian daily La Repubblica published yesterday.
International oil and gas firms are seeking new deposits as existing fields become depleted. Egypt's energy demand is rising as the Arab world's largest population grows, making the country more reliant on imports from Persian Gulf states. The latest discovery will contribute to Egyptian supply for decades, Eni said.
"A find of this size should be enough to cover a lot of Egypt's energy gap," Mr Robin Mills, a Dubai-based analyst at Manaar Energy Consulting, said on Sunday.
"They'll likely have to meet domestic needs first, before any export plans are discussed."
Eni will likely sell most of the fuel into Egypt's domestic market, said a spokesman, asking not to be identified, citing company policy.
With a minimum development period of at least four years, it would be about 2020 before any production starts in the block, Mr Mills said. Eni said it planned to appraise the field and start "fast- track development".
It did not provide a timeline for the project in the statement.
Part of the output from the Egyptian field could be shipped to Italy or other destinations as liquefied natural gas, Mr Descalzi told the newspaper.
Eni is a partner in a plant in Damietta on the Mediterranean coast that chills gas until it transforms into a liquid so it can be loaded on vessels and transported to buyers not connected by pipelines. The facility has not been operating for lack of gas, Mr Descalzi said.
As Egyptian domestic demand has swelled, the country is consuming most of its production and has cut gas sales abroad.
Natural gas futures in New York have dropped more than 30 per cent in the last 12 months.
Meanwhile, Maersk has won British approval for a US$4.5 billion (S$6.3 billion) development plan for the Culzean natural gas field as the Danish company tries to ramp up output at its energy division.
The field, located in the central part of the British area of the North Sea, is expected to produce enough natural gas to meet 5 per cent of Britain's total demand in 2020 or 2021, Maersk said in a statement yesterday.
Maersk Oil will be the operator of the field with a 49.99 per cent stake, while JX Nippon Oil and Energy Corp has 34.01 per cent and BP 16 per cent.
Maersk Group chief executive Nils Smedegaard Andersen said earlier this month that the company is actively searching for North Sea oil acquisitions as the drop in energy prices makes takeovers attractive. The company wants to return focus to its North Sea waters, where it first started operations in the 1960s and has a market-leading advantage with its technologies, he said.
"Culzean is the latest in a series of large investments by Maersk Oil in the North Sea where we are active in Denmark, Norway and the UK, reflecting our commitment to the future of the North Sea region," said Maersk Oil chief executive Jakob Thomasen in the statement.
Maersk estimates that the Culzean gas condensate field has resources of as much as 300 million barrels of oil equivalent. Production will start in 2019 and continue for at least 13 years, Maersk said.
BLOOMBERG
