Huge gas find off Egypt sign of many more: Eni

A female employee fills the tank of a car at a petrol station in Cairo, Egypt, in this February 24, 2016 file photo. (Reuters)
Updated 15 March 2017
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Huge gas find off Egypt sign of many more: Eni

NICOSIA, Cyprus: The discovery of a huge natural gas deposit in Egyptian waters has boosted hopes of other such finds in the eastern Mediterranean that could help meet Europe’s energy needs, a senior official with Italian oil and gas company Eni said Tuesday.
Eni SpA Chief Exploration Officer Luca Bertelli told a gas conference Tuesday that his company’s “milestone” discovery of Zohr, estimated to hold 30 trillion cubic feet of gas, has reinvigorated the interest of other major oil and gas companies in the region.
He said waters off Cyprus hold potential for new discoveries while exploration opportunities are coming up with Lebanon and Israel soon offering offshore areas, or blocks, to bidders for exploration licensing.
Bertelli said Eni expects the first gas to start flowing from Zohr by the end of 2017 to meet Egypt’s domestic demand for decades. Fully developing the deposit will cost up to €12 billion ($12.8 billion).
For export, Bertelli said Egypt could bring two idle processing plants back on stream to liquefy gas so it can be exported to the European markets.
He said geological features off Cyprus are similar to those around where the Zohr deposit was discovered, raising hopes for new finds. Earlier drilling by Texas-based Noble Energy discovered a field estimated to contain over 4 trillion cubic feet in reserves.
If more fields are discovered off Cyprus, the island could opt to build a processing plant of its own to export gas, said Bertelli.
Now that Eni’s gas discovery has put Egypt’s Mediterranean waters on the map, major international oil companies say they plan to step up their investments in the country, expecting to find more oil and gas.
Once a net gas exporter, Egypt has turned into a major importer in recent years as growing domestic demand outstripped production, but the discovery of the Zohr field is expected to change that.
The field is expected to come into production by the end of the year and will save Egypt billions of dollars in hard currency that would otherwise be spent on imports.
The Egyptian government is also seeking to attract foreign investors as it seeks to transform itself into a gas trading hub for its own and other emerging Mediterranean producers.
Globally, Egypt remains outside the top 10 countries in gas reserves, with Russia, Iran and Qatar holding by far the largest.


Oil slips to around $63 as Iran concerns fade for now

Updated 25 min 1 sec ago
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Oil slips to around $63 as Iran concerns fade for now

  • US crude inventories expected to fall for 6th week
  • Goldman cuts 2019 oil demand forecast

LONDON: Oil slipped to around $63 a barrel on Tuesday as concerns faded for now that rising tensions in the Middle East would escalate and hit oil supplies, compounding the impact of a weaker demand outlook.
Iran’s capture of a British oil tanker last week sparked worries about supply disruptions in the Strait of Hormuz, through which about a fifth of the world’s oil flows, prompting crude to rally on Monday.
But oil prices have since pared some gains. Brent crude fell 31 cents to $62.95 a barrel by 1227 GMT on Tuesday. US West Texas Intermediate crude slipped 23 cents to $55.99.
“The response of oil prices to the seizure of a British oil tanker by armed Iranian forces near the Strait of Hormuz has been amazingly muted so far,” said Carsten Fritsch, analyst at Commerzbank.
“It appears that the majority of market participants are convinced that there will be no open conflict between the West and Iran,” he said.
The tensions come as the United States aims to cut off Iran’s oil exports and against the backdrop of supply cuts led by the Organization of the Petroleum Exporting Countries since the start of the year to prop up prices.
As part of US efforts, Washington has imposed sanctions on Chinese state-run energy company Zhuhai Zhenrong Co. Ltd. for allegedly violating restrictions imposed on Iran’s oil sector.
Despite lower Iranian exports and OPEC’s voluntary supply curbs, oil supply is exceeding demand due to strong growth in output from the United States and other non-OPEC producers, according to the International Energy Agency.
A weaker outlook for oil demand because of slowing economic growth has weighed on prices, which are still up by 18% in 2019 helped by the OPEC-led supply pact.
“Although prices had been driven by supply developments in the first half of the year economic considerations are making oil bulls careful this month,” said Tamas Varga of oil broker PVM.
Goldman Sachs lowered its 2019 oil demand projection on Sunday, joining other forecasters such as the IEA and OPEC in trimming its outlook for fuel use.
Oil may gain further support from expectations of another drop in US crude inventories in weekly reports due later on Tuesday and on Wednesday. Analysts expect a 3.4 million-barrel drop in crude stocks.
The American Petroleum Institute, an industry group, releases its inventory report at 2030 GMT.