Deal Insight

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

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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 contains

  • Document

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

    PDF 368.59 KB

Table of contents

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

Tables and charts

This report includes 9 images and tables including:

Tables

  • Executive summary: Table 1
  • Executive summary: Table 2
  • Deal analysis: Table 1
  • Deal analysis: Table 2
  • Deal analysis: Table 3
  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2

Images

  • Wood Mackenzie base modelling assumptions for Zohr (gross)
  • BP's Nile Delta portfolio

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