Eni of Italy signs exploration and production deal in Oman following licensing round

Company has won contracts in UAE and Bahrain this week

Eni announced one of biggest Angolan discoveries in years. Reuters

Eni and its Omani partner have signed an exploration and production sharing agreement with the sultanate as the Italian oil and gas company continues to win a string of energy contracts in the Arabian Gulf.

Eni and state-owned Oman Oil Company Exploration and Production entered into an exploration and production sharing agreement (EPSA) for Block 47 with the Omani government, it said in a statement on Monday.

Block 47 is located onshore in the Omani A’Dakhiliyah governorate and covers an area of about 8,524 square kilometres. Eni and OOCEP won the bid as part of the 2017 Oman licensing round. Eni will be the operator of the block with a 90 per cent stake, while OOCEP will retain the remaining interest. Exploration operations are expected to start this year.

The Italian company also signed with Oman’s Ministry of Oil and Gas and British oil major BP an agreement to set up the principles for the acquisition of the exploration and production rights of the onshore Block 77, which lies 30km east of the BP-operated Khazzan gas field.

Under the deal, Eni and BP, each will hold a 50 per cent stake in the block, with the former acting as an operator during the exploration phase.

“The signature of Block 47 EPSA and Block 77 HoA [heads of agreement], represents a further step in Eni’s strategy to reinforce its presence in the sultanate of Oman and strengthen the collaboration with OOCEP, which is Eni’s partner also in Block 52,” the company said in a statement.

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Eni said on Sunday it won three concessions in Sharjah’s first competitive bid, adding to the company's partnerships in the UAE’s energy industry. State-owned Sharjah National Oil Corporation, which launched the bidding round last year, awarded Eni areas A, B and C onshore exploration concessions. The value of the deal was not disclosed, nor was it specified when the exploration will begin.

On Sunday, the Italian company also signed a preliminary agreement with the National Oil and Gas Authority of Bahrain to explore Block 1, an offshore area of over 2,800 square kilometres. The area, still largely unexplored, is located in the northern territorial waters of Bahrain with water depth ranging from 10m to 70m.

Eni has been on a winning streak in Abu Dhabi, clinching several deals as the emirate forges ahead with plans to boost oil and gas capacities.

State-owned Abu Dhabi National Oil Company said on Saturday it awarded two offshore exploration blocks to a consortium led by Eni and PTT Exploration and Production Public Company of Thailand in its first competitive bid round.

The consortium will invest at least Dh844 million to explore and appraise the two blocks that cover a combined area of about 8,000 square kilometres. Under the agreement, Eni will operate the concessions, while both companies will hold a 100 per cent stake during the exploration period.

Last year, Eni won a 10 per cent stake in the Umm Shaif and Nasr Offshore concession and a 5 per cent stake in the Lower Zakum concession, making it the first Italian company to win such deals in Abu Dhabi's oil and gas sector. Eni was also awarded last year a 25 per cent stake in the Ghasha ultra sour gas concession, which contains high levels of sulphur that need to be stripped to produce gas for consumption.