Italian energy giant Eni has received several expressions of interest in buying a stake in Zohr, the large gasfield it discovered off the coast of Egypt last year, and is on track to complete a deal in 2017, says Claudio Descalzi, its chief executive. Such a rapid disposal of a chunk of Zohr would provide a boost to Eni, by reassuring investors that it can meet its planned target for €7 billion in asset disposals by 2019, and by removing some of its exposure to a project that is very promising but also carries geopolitical risk. In an interview with the Financial Times, Descalzi said that "informally" there were "a lot of entities interested" in acquiring a stake in Zohr. "In Zohr we own 100 per cent," he said. "It's a big development. And there is room also to accommodate some other partners." Eni is expected to sell about 20 per cent of the project and one analyst, who declined to be named, said this could be worth about $1.6 billion. The Zohr gasfield could be appealing to potential buyers because production could start quickly with low development costs because it is close to existing Egyptian infrastructure. Descalzi did not say who was in the mix. But one person involved in the talks said there was interest from international oil majors and national oil companies. Descalzi was also optimistic about Eni's chances of selling a further stake in its Mozambique gasfield — the other key disposal the company was looking at. Eni sold a stake to China's CNPC when oil prices were high, but it has accepted that it will earn much less at current oil prices. "In Mozambique I hope to be able to close by the end of this year," Descalzi said. The importance of selling the stakes in Mozambique and Zohr has increased in recent weeks after the collapse of Eni's talks to sell Versalis, its chemicals business, to SK Capital, a private equity fund, in a deal that could have been worth more than €1bn. Like other oil and gas companies, Eni is under pressure to cut costs and become more efficient following the plunge in oil prices since mid-2014, even though they have rebounded this year. Eni recorded a net loss of €8.8 billion for last year, compared with a profit of €1.3 billion in 2014. A sale of a stake in Zohr would allow Eni to find a partner that could share some of the project's development expenses. It would also remove some of the political risk associated with operating in Egypt, which has faced instability. Descalzi was appointed to lead Eni in 2014 by Matteo Renzi, Italy's prime minister, whose government holds a 30 per cent stake in the company. But while Descalzi and Renzi are seen to be very close, he dismissed worries about mounting political uncertainty in Italy, with the populist — and environmentalist — Five Star Movement, leading the polls over the ruling Democratic party. "I'm not involved in politics, and I think that I have to answer to my shareholders, not to politicians," he said. Descalzi also called on oil producers both inside and outside Opec to reach a deal on stabilising oil prices, after the failure of talks in Doha in April. Source: The Financial Times
