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Eni S.p.A. (ticker: E) believes its Zohr Prospect, located about 120 miles off the coast of Egypt, could hold as much as 30 trillion cubic feet (Tcf) of lean gas, the company announced on August 30, 2015. According to the news release, the discovery is reportedly the largest in the history of both Egypt and the Mediterranean Sea.

The Zohr Prospect was drilled in 4,757 feet of water depth and reached total depth of 13,553 feet, encountering 2,067 feet of hydrocarbons in the Miocene formation. More than 1,300 feet are anticipated to yield net pay. The Cretacious formation will be targeted in a future well. Eni holds a 100% contractor’s working interest in the block, which was awarded in a January 2014 bid round with the Egyptian Ministry of Petroleum and the Egyptian Natural Gas Holding Company.

Zohr Field, by Comparison

Source: EIA

Source: EIA

The Zohr Field by itself is believed to have more gas in place than several countries, let alone gas plays. Mexico, by comparison, had 17 Tcf of proven reserves in its onshore assets as of year-end 2013. In an interview with CNBC, Claudio Descalzi, Chief Executive Officer of Madrid-based Eni, said the Zohr’s production will be used domestically and “will be able to ensure satisfying Egypt’s natural gas demand for decades.”

Egypt and Eni

Eni has operated in Egypt for more than 60 years and is currently the nation’s top producer with total output exceeding 200 MBOEPD. Initial production from the Zohr Field can ramp up rather quickly; Descalzi believes a well can be drilled in about one month and is located nearby midstream facilities. In its Q2’15 press release, the company announced an agreement to invest up to $5 billion in Egypt’s hydrocarbon industry “over the next few years.”

The energy demand is certainly in place for Africa’s third most populated country. According to the Energy Information Administration, Egypt is Africa’s largest oil and natural gas consumer and demand is on the upswing due to energy subsidies and a climbing population. The country’s increasing natural gas consumption has dug into its export market, which declined 30% annually from 2010 to 2013.

Descalzi has already met with Egypt’s president, prime minister and petroleum minister to discuss the logistics and intentions of the project, Eni said in a release.

Israel Loses Out

News of the massive find sent shocks through the Israeli oil industry, which has been trying to develop a plan for natural gas production from its Leviathan field in part to service Egypt’s energy needs. The Israeli government is struggling to reach an agreement over how best to develop Leviathan, and news that Egypt will likely be able to meet its own natural gas needs represents a step back for those looking to move forward on the project.

“It adds a whole new layer of uncertainty to an already very messy situation,” said Gal Luft, an energy security expert and senior adviser to the Unites States Energy Security Council. “It essentially postpones any prospect for a deal.”

After the news broke, shares of Israeli Delek Group (ticker: DLEKG) fell 12%, while its Texas-based partner Noble Energy (ticker: NBL) saw share-price shed 3.2% of its value. The oil and gas index on the Tel Aviv exchange fell 13% following the news, but stabilized Tuesday.

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