Sources at the Italian company Eni said that the company was forced to withdraw the Saipem Santorini drilling ship from the Egyptian Zohr gas field, as a result of not receiving $1.6 billion due to it from the Egyptian government. An Egyptian source says that field development operations are currently completely halted, after Eni refused to complete the work without receiving its dues.
The American Energy Platform (which specializes in energy affairs) stated that in light of Eni’s withdrawal, plans to develop the Zohr field (the largest gas field in Egypt) are facing a halt that will prevent increased production of the country’s most important gas production sources.
Sources at the Italian company Eni revealed, in statements to the Specialized Energy Platform (based in Washington), that it was forced to withdraw the Saipem Santorini drilling ship from the Zohr site, as a result of the company not receiving its dues from the government.
“Santorini” is a seventh-generation drilling vessel equipped with two anti-eruption devices and seven cavities, which places it at the forefront of high-performance vessels for drilling in ultra-deep waters.
The Santorini drillship has the ability to work in water depths of up to 12,000 feet (more than 3,500 metres), as it carries the latest solutions in the field of digitization and automation that ensure high standards of safety and environmental consideration.
Financial dues
The sources said that Eni received 270 million US dollars some time ago, but it still has 1.6 billion dollars left.
For its part, the specialized energy platform contacted a source in the Ministry of Petroleum and Mineral Resources in Egypt to confirm the authenticity of Eni’s statement. He said: “We have already paid the company $270 million, but there is still other debt, and we tried with them to complete the work on developing the Zohr field and pay the rest of the amount.” Later”.
The source added that the Minister of Petroleum, Engineer Tarek El-Molla, made a great effort in this file, and communicated with the CEO of the Italian company Eni, Claudio Descalzi, but “attempts to convince them did not succeed.”
Egypt plans to pay 20% of the dues of foreign oil and gas companies operating in the country, which amount to $4.5 billion, during next June.
Egypt paid $1.5 billion in dues to foreign oil companies last March, after the country’s treasury recovered as a result of the Ras El Hekma deal and the agreement with the International Monetary Fund.
Zohr field development operations have been halted
The Egyptian source explained that the Zohr field development operations are currently completely halted, after the withdrawal of Eni’s excavator. He added that it was supposed to reroute two wells in the Zohr field, and also develop the Narges well and Nour 2 well (an appraisal well that was not drilled), but all of that is currently on hold.
The production of the Egyptian Zohr field recorded the largest decline since its discovery about 9 years ago, during the last 5 months, reaching about 1.9 billion cubic feet per day.
The decrease in Zohr field supplies caused Egypt’s natural gas production to decline for the sixth quarter in a row, during the first 3 months of this year, losing about 2.108 billion cubic meters compared to the corresponding quarter of 2023.
Total natural gas production in Egypt decreased to 13.429 billion cubic meters during the period from January to the end of March 2024, compared to 15.537 billion cubic meters in the same quarter of 2023.
