Italian oil and gas major Eni has announced selling a 10 per cent stake in its concession area in offshore Egypt, which includes the giant Zohr gas field, to Abu Dhabi’s exploration and production company Mubadala Petroleum.

Eni is reported to have sold the 10 per cent stake in the Shorouk concession to Mubadala for $934m.

Eni subsidiary Italian-Egyptian Oil Company (IEOC) currently holds a 60 per cent stake in the block, the biggest ever gas discovery in the Mediterranean Sea, with a capacity to produce 400 million standard cubic feet a day. Russia’s Rosneft holds a 30 per cent share and the UK’s BP a 10 per cent stake.

The deal with Mubadala fits with Eni’s ‘dual exploration’ strategy, as part of which the Italian firm aims to sell down stakes in fields it operates in order to raise cash to fund future development and drive growth.

“[The deal] represents a further signal about the strength and quality of this world-class asset,” Eni’s chief executive Claudio Descalzi was quoted as saying in media reports.

Production at Zohr began late last year and should add 70,000 barrels of oil equivalent per day for Eni this year, Descalzi recently said.

The Zohr gas field stake sale to Mubadala comes at a time of Eni's purchase of stakes in Abu Dhabi’s offshore oil concession from state operator Abu Dhabi National Oil Company (Adnoc).

On 11 March, Eni signed a 40-year deal with Adnoc to purchase two offshore oil stakes – a 10 per cent share in the Umm Shaif and Nasr zone and a 5 per cent share in Lower Zakum – for a total participation fee of about $875m.

This is the first time the Italian company has won an oil block in the UAE, a move that balances its global portfolio which has been focussed on North Africa.

“Eni is very strong in North Africa, but has traditionally been under-exposed to the Middle East when compared to its peers,” says Tom Quinn, senior research analyst, Middle East Upstream, at consultancy firm Wood Mackenzie. “The company has picked up exploration blocks in Oman and Lebanon, which, being frontier, are high risk but potentially high reward.

“To balance this, the Adnoc deal provides low-risk, long-term barrels, and lays the foundation for Eni’s Middle East portfolio.”