Eni's Winning Gas Streak Leaves Competition Chafing



Reuters

MILAN, Sept 25 (Reuters) - Eni's giant Zohr gas find in Egypt this month, a gamble taken under the noses of competitors, marked the Italian major's rapid rise to preeminence in the hunt for big new fields.

Its risk-taking new leadership went ahead with what rivals described as an opportunistic drilling plan, leaving peers BP, BG, Royal Dutch Shell and Total regretting they missed a golden opportunity.

Zohr is Eni's fifth major oil and gas discovery in just 3 years giving it the best track record in reserve replacement as well as one of the lowest cost bases.

The 30 trillion cubic feet gas field, the biggest ever discovery in the Mediterranean, pleased investors, vindicating CEO Claudio Descalzi's new strategy of revisiting mature basins where infrastructure and know-how are already in place and where new in-house technologies and geological skills can be used to discover more.

But it left some majors with a bitter taste. The field used to be part of a huge block where Shell sunk wells, all of which turned out dry or non-commercial. The area was later repackaged and offered to others, including Eni and BP.

Earlier this year Eni opened a data room to find a partner to help develop Zohr. None of those that participated made a bid before the room closed in July -- just one month before Eni made its drilling breakthrough.

"BP, BG, Total and Edison all went into the data room but made no offer because they simply didn't believe in it," two sources close to the matter said.


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