Eni ‘supergiant’ gas field discovery a gamechanger: CEO | CNBC

Eni ‘supergiant’ gas field discovery a gamechanger: CEO

Arjun Kharpal | @ArjunKharpal

31/August/2015
CNBC.com

TEKMOR note: Egypt's Zohr field is just 3 nautical miles away from Cyprus' plot 11 

Eni's discovery of potentially the world's largest natural-gas field off the Egyptian coast will be a gamechanger for Egypt and the Mediterranean in terms of energy stability, the CEO of the Italian energy giant told CNBC on Monday.

On Sunday, Eni said in a press release that it had discovered a "supergiant" gas field that could hold "a potential of 30 trillion cubic feet of lean gas in place." It said the discovery well was located off Egypt's Mediterranean coastline at a depth of 1,450 metres with the prospective Zohr field covering an area of about 100 square kilometres (60 square miles).

Eni said that the discovery could satisfy Egypt's natural gas demand for "decades".

On Monday, Claudio Descalzi, CEO of Eni, told CNBC: "It is changing the game for Egypt…It is very important for Egypt, but also for the Mediterranean in terms of stability."

Descalzi could not give a timeline for when the gas might hit the market, but said developments would be quick as the gas field was in close proximity to Eni's processing facilities.

"It is close to the facilities so the time to market will be very good… that is part of our strategy to…continue to do our exploration in the mature area where we have a deep geographical knowledge and we can take advantage of our facilities and that will make the unit cost in terms of capital very positive," the CEO said.

"I don't want to put a date now but it is a question of a few years to have production—then a full production, that will be a very quick fast track development," Descalzi added.

Energy price concern?

State-backed Eni has market capitalization of around 54 billion euros ($61 billion) and is the biggest foreign producer in Africa. It has operated in Egypt for more than 60 years through its Egyptian subsidiary IEOC and is one of the main energy producers in the country, with a daily output of 200,000 barrels of oil equivalent.

Adam Jeffery | CNBC

In June, it signed an energy exploration deal with Egypt's oil ministry worth $2 billion following an memorandum of understanding signed in March during an investment conference, allowing the Italian major to explore in Sinai, the Gulf of Suez, the Mediterranean and areas in the Nile Delta.

Eni operating in what is a tough environment for energy companies with a low and volatile oil price. Earlier this year, the Italian firm cut its dividend and said it would cut investments by 17 percent in the 2015 to 2018 period.

However, Descalzi expressed confidence on Monday in response to questions about the commodity price slide and Iran coming back to the markets.

"This type of discovery…is another positive response to this kind of low price environment," the CEO told CNBC.

"Gas has a big future because of the environmental constraints. The new environmental targets for emission will give gas more power because renewable with gas will be the future in terms of the sustainability of our energy system. I'm very positive on the gas market," he added.

-Reuters contributed to this report.

Source: http://www.cnbc.com/2015/08/30/eni-makes-huge-natural-gas-deposit-find-off-egypts-coast.html

Analyst: Mideast Gas a Chance for U.S. to Break with Turkey | Israel National News

Analyst: Mideast Gas a Chance for U.S. to Break with Turkey

The natural gas fields in the Mediterranean provide the United States with an opportunity to break with Turkey, according to Seth Cropsey.

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By Elad Benari

First Publish: 8/20/2013, 1:14 AM

The natural gas fields in the Mediterranean provide the United States with an opportunity to break with Turkey, according to Seth Cropsey, formerly the deputy undersecretary of the Navy in the Reagan and George H. W. Bush administrations.

“Politics and alliances in the eastern Mediterranean are shifting, and the region’s security framework is splintering,” Cropsey wrote Monday in PJ Media. “The region is now divided as much within the Muslim world as between it and the non-Muslim states.”

“A new order is emerging as a result of three major events: the redrawing of the region’s hydrocarbon map, with the discovery of substantial hydrocarbon deposits in the Cypriot and Israeli exclusive economic zones; Turkey’s adoption of a hostile neo-Ottoman ideology to guide it in the 21st century; and the ‘Arab Spring,’” wrote Cropsey. “At the mid-point of this political shift, Greece and Cyprus — coordinating with Israel — have remained the principal states in the region that are friendly to the West. When volatility and fear are on the rise, predictability becomes especially prized.”
“The roles of Greece and Cyprus in the West’s political and security framework offer U.S. policy makers an arc of stability in the eastern Mediterranean, and bring the EU to within 45 minutes of Israel’s borders,” he wrote. “Port usage, naval facilities, and strategic airbases that Cyprus and Greece have long extended to the United States permit a U.S. Sixth Fleet — if the U.S. should decide to return that once-powerful naval force to even a fraction of its former strength — to safeguard the region’s sea lines of communication. The region’s increasing volatility has elevated the strategic roles of Greece and Cyprus, and offers an incentive for American statesmen to promote a new order that establishes stronger relations with both countries and bolsters their regional standing.”

According to Cropsey, “The U.S.’s interest and involvement in the Mediterranean dates to the Jefferson administration. The United States has sought a stable region since the U.S. Navy battled the Barbary pirates in the early 19th century to keep them from preying on American commercial interests from their ports in North Africa. The ascendance of radical Islam as the region’s most dynamic political force, and the deepening connections of the radicals with the ‘Arab Spring,’ is a great threat to U.S. interests — as the recent closure of 19 U.S. embassiesfrom North Africa to the Middle East and as far south as Madagascar demonstrates. Islamist and authoritarian regimes have emerged after the demise of the region’s ancien régime. The regional drift toward authoritarian Islamism is a reminder of the late Harvard professor Samuel Huntington’s warning about a clash of civilizations, and suggests a struggle as long and dangerous as the one that occupied Europe’s attention throughout the centuries-long reign of imperial Ottoman rule.”

“The Ottomans’ successor, modern-day Turkey, has abandoned the Kemalist enterprise and is governed by an increasingly repressive, hostile, and Islamist regime,” says Cropsey. “Turkey’s economic growth has encouraged Prime Minister Tayyip Erdogan to hew to his ideology, casting aside modern-day Turkey’s westward-looking and secular character that succeeded the collapse of the Ottoman Empire. In its place, Mr. Erdogan has reoriented Turkey towards the East, emphasizing Sunni Muslim solidarity and hostility towards the U.S.’s non-Muslim allies in the region. Erdogan’s policy looks to reestablish the hegemony that his Ottoman predecessors achieved.”

He noted that “A combination of Islamist rule, a neo-Ottoman, ideology and Turkey’s attempt to return as the region’s hegemon opposes the U.S. goal of a democratic and peaceful region. It threatens America’s allies — Greece, Cyprus, Israel, and new EU member Bulgaria, which has complained of Turkey’s control over both supplies and prices of the natural gas it transits to the EU.”

He further stated that “Greece and Cyprus have become far more important to U.S. foreign and security policy. Both states have a strong interest in regional energy security, as does Israel, whose navy in April of this year asked for a $760 million budget increase to help defend the newfound hydrocarbon deposits in Israel’s territorial waters. Israel’s naval capabilities complement its superior air force; together, they have a regional impact.”

“In 2011, U.S. based Noble Energy discovered seven trillion cubic feet (TCF) of natural gas in Cyprus’ Block 12,” he noted. “One hundred-seventy-five miles to Cyprus’ east, Israel has found an even larger deposit: 31 TCF of natural gas. Cyprus believes it holds up to 60 (TCF) of natural gas in its 12 blocks, which, if proven, would make Cyprus the EU’s second largest energy source after Norway. Cyprus has recently signed a memorandum of understanding with U.S.-based Noble Energy to begin the construction of a liquefied natural gas (LNG) facility on its southern coast at Vassilikos. The unprecedented joint development projects between Israel and Cyprus to develop their resources and consolidate them will transform the two states into major regional energy exporters, and improve their already strong relations.”

“The Israeli ambassador to Athens, Arie Mekel, has emphasized regional energy cooperation,” noted Cropsey, who quoted Mekel as saying, “We believe that these three countries, Israel, Greece, and Cyprus, if we work together and use our power like in the area of natural gas, we could become together a regional power that will be able to stand up to other regional powers.”

“The U.S. will advance its compelling interest in greater European energy independence, Middle Eastern stability, and NATO’s future as an effective alliance by re-examining its old idea of Turkey, and reinforcing its alliances with Greece, Cyprus, and Israel. The alternative — the passivity of ‘leading from behind’ — offers nothing but weakness and additional evidence that we are slowly withdrawing from the world,” concluded Cropsey.

Link to article: http://www.israelnationalnews.com/News/News.aspx/171089#.UhMYYNK8D5C