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    Eni buys up BP's Algerian gas assets

Summary

Eni has been lining up a deal for BP's In Amenas and In Salah stakes for several months.

by: Callum Cyrus

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Complimentary, Natural Gas & LNG News, Europe, Security of Supply, Corporate, Political, News By Country, Algeria, Italy

Eni buys up BP's Algerian gas assets

Italian major Eni closed on its purchase of BP's upstream gas assets in Algeria, gaining access to an estimated 11bn m3/yr of gas output in gross terms through the UK major's stakes in the In Amenas and In Salah production concessions.

BP holds a 45.89% working interest in In Amenas and 33.15% in In Salah, Eni said September 7. The two production licences are operated by Sonatrach and Equinor respectively, both lying in Algeria's southern Sahara desert region.

Eni says the deal will strengthen efforts to meet European gas demand, building on the acceleration of its north Africa E&P activities that gathered pace following Moscow's invasion of Ukraine in February. Eni said July 29 that a successful E&P campaign in Algeria and Egypt had lifted its reserves base, by around 300mn barrels of oil equivalent (boe).

Italian midstream operator Snam's CEO Stefano Venier on September 5 clarified Italy is less reliant on Russian gas volumes through the suspended Nord Stream route, as it generally takes Gazprom's gas through via Ukraine transit system.

Russia's share of Italian gas imports has dropped sharply since before the war, falling from 40% pre-invasion to 15-20% at the end of August, according to Montel, and Eni's strengthened presence in Algeria will further protect Italian gas flows, given that it is already the largest Algerian upstream player. By 2023, Eni expects oil and gas output from Algeria to reach 120,000 boe/day, up from around 100,000 boe/day at present. In the following two years Eni aims to phase Russian gas purchases entirely, displacing around 20bn m3 by 2025 thanks to increased output from Algerian, Egyptian and Congo-Brazzavile assets.

A deal to buy into In Amenas and In Salah has been in Eni's M&A pipeline for several months, in talks that also saw Eni and BP merge operations in Angola to form the new Azule Energy partnership, the deal having launched in August with a goal of producing 250,000 boe/day net by 2027, split 50-50 between Eni and BP.