Deal insight
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7 Pages

BP and Rosneft buy in to Eni's flagship Zohr development for $2.1 billion

BP and Rosneft buy in to Eni's flagship Zohr development for $2.1 billion

Report summary

BP is acquiring 10% and Rosneft 30%. The two deals were announced separately, two weeks apart, but are being done on exactly the same terms. Eni discovered Zohr in August 2015, and has been negotiating with potential farm-in partners ever since. This is a very attractive project. Zohr holds up to 30 tcf of lean gas in place, making it one of the largest ever gas discoveries in the Mediterranean. The development is of huge strategic importance to both Eni and the Egyptian government, and is being fast tracked: FID and government approval were received in early 2016. Eni is targeting first gas in late 2017, quickly ramping up to a plateau of 2.7 bcf/d in 2019. Even under our more conservative modelling assumptions (start-up Q1 2018; plateau of 2.5 bcf/d from 2021), we calculate that the project generates a full cycle IRR of 16%. Deal economics look good.

What's included?

This report includes 1 file(s)

  • BP and Rosneft buy in to Eni's flagship Zohr development for $2.1 billion PDF - 368.59 KB 7 Pages, 7 Tables, 2 Figures


The upstream oil and gas industry conducts activities against a backdrop of growing energy and environmental challenges. Political instabilities, international conflicts and government and environmental regulation have all impacted the production process.

This has forced companies to re-examine their corporate strategy, moving away from high-risk exploratory drilling to lower-risk exploration in mature basins as they search for increased returns.

This Upstream Oil and Gas Deal Insight report provides an in-depth analysis of this deal. You will also find information about upstream assets and the strategic rationale behind the deal.

For investors and businesses, this deal insight report provides an understanding of the effect this deal will have on the market, including oil and gas pricing and assumptions. Use it to keep up to date with deal announcements, gain expert insights and analyse potential developments that might affect your strategy.

Wood Mackenzie goes beyond company-reported data and announcements to give you an independent and informed view. Our unique valuation metrics are underpinned by our deep understanding of upstream assets and companies. We help you objectively benchmark and evaluate asset and corporate deals so you can compare deal economics around the world.

  • Executive summary
  • Transaction details
  • Upstream assets
  • Deal analysis
  • Upsides and risks
  • Strategic rationale
    • Eni
    • BP / Rosneft
  • Oil & gas pricing and assumptions

In this report there are 9 tables or charts, including:

  • Executive summary
    • Executive summary: Table 1
    • Executive summary: Table 2
  • Transaction details
  • Upstream assets
    • Wood Mackenzie base modelling assumptions for Zohr (gross)
  • Deal analysis
    • Deal analysis: Table 1
    • Deal analysis: Table 2
    • Deal analysis: Table 3
  • Upsides and risks
  • Strategic rationale
    • BP's Nile Delta portfolio
  • Oil & gas pricing and assumptions
    • Oil & gas pricing and assumptions: Table 1
    • Oil & gas pricing and assumptions: Table 2
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