Eni Aiming to Cut Stake in Egypt's Zohr Offshore Gas Find to 50%

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.

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 event.

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 2017.

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 50 percent.

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.